Receivable/Accounts - Information for Credit and Collection Issues

Friday, August 22, 2014

Collection Tip – Positive Reinforcement

In many cases, credit and collections professionals spend most of their energy combatting negative behaviour.  Missed payment deadlines, avoidance of contact, NSF cheques, broken promises, and rightly or wrongly disputed accounts.  This means most of a collection professionals behaviour and focus is on consequences, authority and ramficiations.  In all that activity, sometimes the effort to employ positive reinforcement is lost, but is very important.

Positive behaviour is important to people.  We’re all human beings and for the most part we want to know that we are appreciated, we have done the right thing, and that if we struggle to meet goals or deadlines or make ends meet, someone has noticed.

In collections, a lot of effort is put into establishing authority, and that often doesn’t involve positive reinforcement, but afterwards – after the bill has been paid, or the phone call has been returned, or information has been provided, there is ample room to acknowledge a consumer’s effort.

Scenario #1 – A Partial Payment Made

Bob has just remitted a partial payment – it’s not the amount past due, but it’s certainly an effort, and better than him not paying at all.  Rather than calling Bob and reprimanding him, this is an opportunity for positive contact.  A balance letter can be sent out that acknowleges the payment, and a telephone call can be made, in which the collector says ‘Bob, I see you made a payment by online bill payment of $150 – I’m pleased to see that.  There appears to be a further $125.84 past due.  What is your plan to deal with the remaining amount?’

Scenario #2 – Documentation Of Dispute Is Received

Susan’s company has been fighting an invoice charge for over a month, and she has finally sent in a lengthly letter outlining the issues with the service provided, and several supporting documentation to show they needed to hire an outside company to repair faulty equipment, or the like.  A telephone call or email to Susan can be very useful, espcially if she admits to partial accountability – this can flow the conversation into at least a partial payment.  Regardless, it’s worthwhile to contact the client and advise them their letter has been received, and what the process is to investigate the dispute.

Scenario #3 – An Irate Consumer Calms Down

Frank has a habit of flying off the handle and yelling at collectors who call him for outstanding accounts.  A few days after an altercation he calls and leaves a calmer voice mail for the collector.  The collection agent should absolutely use this opportunity to acknowledge and reward professional conduct and not provoke Frank into further hystronics.  An email to Frank or a telephone call can go a long way, if the collector states ‘Frank, I see that you gave  me a call yesterday.  I’m wondering if you’ve looked into the details of your account and have some information for me – how can I work with you to make this matter go away?’

Scenario #4 – A Legal File Offers To Settle

Laurie is a defendant in a small claims court action – the claim has been filed with the court, and served on her.  Suddenly, she’s gone from avoiding the call to reaching out to make arrangements.  This is not the point to ‘hold her feet to the fire’.  After all, the point of taking a court action is to receive payment.  If Laurie is offering reasonable payment arrangements, and is willing to settle for a significant amount, or make payments on the balance and cover legal costs spent thus far, why wouldn’t the paralegal or collector reach out to Laurie and see what she has to say?  Of course, arrangements should be put in writing, and be firm before the court action is halted, but there is absolutely no reason not to meet with Laurie, and negotiate payment.


These are very simple examples, and to many stating obvious common-sense processes, but I have seen both creditors and collectors get caught up in a confrontational, emotional attitude that throws all this reasonable thinking out the window.  Thoughts like ‘I had to go to the trouble of suing Laurie, why would I want to bother listening to anything she has to say now?  I’ll see her in court!’ are not unheard of, because conflict became the focus somewhere along the way, not resolution.  Keep your eye on the end goal and treat people decently in return for them reaching out and attemptipng to work with you, and you will retain more customers, recover more accounts, and have peace of mind with yourself and your co-workers.

If you are a fellow credit and collections industry colleague and want to discuss collection techniques, or are a client who wants to discuss our approach to collecting debt, which we refer to as the APPRAISE process, feel free to give me a call.

Thanks kindly,

Blair DeMarco-Wettlaufer
KINGSTON Data and Credit
Cambridge, Ontario

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