Receivable/Accounts - Information for Credit and Collection Issues

Thursday, February 20, 2014

Gamification and the Credit Industry III – Blood Sports

So, in the last two segments on gamification, we’ve talked about the psychology behind gamification and ways it can motivate or focus employees into working more efficiently and enjoying their results.  However, there is a downside to gamification, and sadly, our industry has an undercurrent of ‘blood sport’ mentality, or rather running gamification to bring out the worst in their staff.

You can’t blame the staff though – if you build the rules of the game to reward aggressive behaviour, one-upmanship, or working against the company’s best interests, it’s hardly their fault.  The point of the previous articles points out that games or challenges evoke behaviour in employees.  If the game is flawed, so will be the behaviour.

Sometimes the gamification is caused by the management of a collection agency, and sometimes it is caused by the creditors themselves.  We’re going to look at some examples of how inadvertent gamification can harm our industry.


Let’s shine a light on one of the oldest ‘tricks’ amongst collection staff.  Every experienced collector has certainly heard this term.  Typically, a collector is assigned a target or breakeven revenue target to reach in order to achieve a bonus or commission – if the target is easily surpassed, there isn’t an issue.  However, many agencies or managers set high-reaching goals, meaning their staff have low odds of achieving target.  So, if the end of the month approaches, and the collector is clearly not going to hit target, they start shifting their payment arrangements to the next month, to shore up their future revenue and the chances of meeting target.

This creates erratic revenue results from staff, a slowdown in revenue towards the end of the month, and while managers run around frantically telling their collectors to ‘get it in by month end’, they have inadvertently shot themselves in the foot by a reward system that can be manipulated.

Stealing Files / Passing Files

Another system subject to subterfuge and manipulation is the pooled account system, where a creditor or agency keeps a number of files ‘unassigned’ – they are either worked by a predictive dialer, or left unmarked until a collector talks to someone, at which point the file can be claimed.  Claimed files that are cured or collected go to the collector’s monthly performance totals, and reflect on their results (which can affect their commission – see sandbagging, above).  Devious staff members will work out systems of trying to route or handle as many incoming calls as possible to grab the ‘easy’ incoming calls, or will aggressively claim files to boost their revenue, often at the expense of co-workers.  Some unsecure systems will even allow collectors to take files from one another, causing even more chaos.

The flipside of this scenario is ditching or passing on files.  Many call centers penalize collection staff for lengthly calls, or hold uncooperative or refusal accounts against their performance numbers – often this will cause staff to ‘escalate calls to a supervisor’, or transfer a file back to a holding pool or another department, to have their call metrics or cure rate look better, all the while dumping work on a co-worker or another staff member.

Intentionally Aging Assignments

Many collection agencies have a contingency or commission scheme based on age – the commission structure increases after the file has been with the agency a certain amount of time, or the delinquency date passes 1 or 2 years.  This will often reward a collector for attempting to collect the file at a later date.  The result?  The agency doesn’t work the account efficiently until the return value of the account increases.  This results in poor performance for the creditor, by the very reward system they established.

RFP Bidding

I’m sure I’ve ranted on enough about this particular issue here, but creditors who put out bids scoring or rewarding the lowest contingency rate from their collection agency get exactly that – the lowest bidder, who will put in the minimum effort after being awarded the bid.  By using a scoring model they have designed, creditors almost always give weight to a quoted price or rate, but rarely take into account expected performance results, brand reputation, or efficiency of communication.


I’m absolutely sure I could ramble on for another few weeks about gamification – while it’s a relatively new term to our industry, and the business world in general, our industry has literally been driven by these concepts and philosophies for decades without the label being plastered on it.  In a service industry our companies are driven by people, and as we are in the business of contacting other consumers and businesses regarding receivables, human interaction and motivation is compounded on both sides of the transaction.  If we don’t understand what motivates our clients, our team, or those we are attempting to collect from, we are working blindly – if we can grasp the concepts of motivation, evaluation, and reward, we aren’t just playing a game, we’re winning on our balance sheets, in our office cultures, and in our business relationships.

If you have any questions, comments, pointed remarks, or ideas about gamification, I’m always willing to talk about it.  Feel free to leave a comment on the blog, or contact me directly.  My direct office number is 226-946-1730.

Thanks kindly,

Blair DeMarco-Wettlaufer
Kingston Data and Credit
Cambridge, Ontario