Where Credit Is Due

If a payment is received by a collection agency, who should receive the credit? In an assigned-file environment, that’s simple – the collector handling the file is attributed the payment. But what do managers do when files are pooled on a predictive dialer? Or worse, when management decides to manipulate file assignments to not give the agent credit?
This sort of behavior is more prevalent than you might think in the third party collection industry – I’ve personally witnessed this at a few agencies I’ve worked at, and recently I received an email from a collection agent asking to address the issue in our blog:

“I am going through a situation at a collection agency where favouritism is present and commission on file closures are sometimes 'taken away'. It really is deplorable and no 'real' explanation is given, other than; "the client chose to close the file", when in actuality you see the agency gain the commission. It is so disheartening as I'm sure this hasn't happened once or twice to collectors. Such a horrible trend. My point, can you write a blog about fair treatment and paying the collection agents what they deserve? I work at an agency where turnover is truly unreal. Once a week someone either leaves or they are fired. Morale is at an all time low. I'm not in management at this office and do not plan on staying for much longer…”


The Provenance of Payments

Collections rarely happen in a vacuum. Payments most often occur because of some sort of action – this can be a phone call, a letter, reporting to the credit bureau, or some other communication attempt. If it happens right away, it’s easy to track. However, the longer it is after the action, the harder it is to pin down why an account was paid.

If a collector takes a pre-authorized payment or credit card payment over the phone, it’s pretty hard to argue that the collector didn’t generate the payment. But why would a file get ‘taken away’ by a manager to make sure a collector doesn’t get credit?

It’s easy to answer why this happens – management doesn’t care about their staff, and they’re cutting corners.


The Power of the People

Payments in collections happen because of people … the collection agents hired, the physical effort made by those staff. So why not give people credit, whenever possible? Is it worth short-changing a collector’s commission for the morale damage or the staff turnover? I really don't think so.

I think management should make every effort to credit every payment made to some staff member, consistently. It can be the last collector to touch the file, it can be to pool “house payments” and share them evenly amongst the staff. It can be to give payments from specific clients to specific staff members. The reason you want to do this is because collection agents spend 80% of their time attempting to collect payments, and only 20% of their time actually taking payments. You value the whole person, don’t you?


Conclusion

Collection agents like the one who wrote me are clearly being taken advantage of – and without collection agents, collection agencies would cease to exist. Our industry depends on experienced, capable people filling a skilled role. People aren’t stupid, they know that you are moving payments to “house”, or hiding the commissions. If you have a fair, reasonable bonus structure, it shouldn’t hurt you to give credit where credit is due.

If you have any questions, horror stories, or suggestions on how to fight this kind of treatment of collection agents, feel free to post a comment or contact me.

Thanks kindly,

Blair DeMarco-Wettlaufer
Kingston Data and Credit
www.kingstondc.com
bwettlaufer@kingstondc.com