Did the birth of the “consumer” and the death of the “debtor” kill the debt collection industry?

As the debt collection industry has tried to be more consumer friendly we changed our vocabulary from “debtor” to “consumer”. How has that also changed the industries mindset? Is it a good thing?

I think not.

It was hard for me to change my vocabulary a couple years ago but it was willingly I did so. As the market started using the word consumer over the word debtor it seemed appropriate. But the longer this has been in effect the more and more I see it affecting the mindset of collectors, managers and owners in a negative way. Consumer lawyers (maybe we should call them debtor lawyers) are why we changed our tune but I think we should have kept the word debtor, its not a bad word.

Somehow the word debtor became a bad word and I am not sure why?

Wikipedia defines a debtor as “If X borrowed money from his/her bank, X is the debtor and the bank is the creditor. If X puts money in the bank, X is the creditor and the bank is the debtor.” and defines a consumer as “The consumer is the one who pays to consume goods and services produced.”

If this is the definition to both words they are debtors not consumers, consumers “pay to consume”,

So why did a whole industry change its vocabulary?  

The truth is we did it from pressure we created on ourselves as an industry. We thought its would make us look more consumer friendly in the eyes of regulators, clients and potential clients. But was this a good thing? I think it has gotten too many collectors and even managers in a mid set that the debtor is right and the collection strategy is the bad factor.

The truth is that debt collection has been getting more and more consumer friendly since I began collecting in 1979. But it has gotten to a high point in 2016 in my opinion. Debt collection has changed to accommodate the consumers’ habits by moving to self-cure websites and IVR systems.

The birth of self-cure 

The birth of debtors curing their debt online with no human interaction is a positive result of the consumer mentality of debt collection. It has allowed agencies and law firms to reduce its compliance exposure and collection expenses by letting the debtor pay online. Most debtors do not really desire to talk to a debt collector when it comes time to pay they just want to make the transaction online. So the use of a payment site is the obvious answer and a best thing to come from the consumer friendly era created by consumer attorneys.

Now what? 

I think as an industry we need to remember that that are both debtors and consumers. Actually our job as an industry is to turn them from debtors into consumers. We have to treat them like consumers but remember that they are debtors till they pay the debt and they need to be handled like debtors.

The fact that our industry has made the effort to allow the debtors to self-cure by creating elaborate payment sites shows our ability to adapt to the consumer model but we still have to remember that most debtors need help to pay their obligations. They need financial counseling, just the push a call makes or they need a payment arrangement that the website cannot approve for them.

Lets remember they are debtors and need our help to pay their bills and become consumers.

4 Things I Find In My Consulting Practice In Almost Every Engagement.

As a consultant I find the same 4 things are lacking or missing at almost every engagement.

  1. 1. Training and development programs and scorecards
  2. 2. Automation of processes
  3. 3. Clear communication from management to staff of goals
  4. 4.The right people in the right jobs

These things seem to be lacking or non existent in most organizations, so how do I suggest they do business, read on.

POST: As a consultant I find the same 5 things are lacking or missing at almost every engagement. It has been a blessing for me as a consultant as it has given me infinite opportunity to build programs that overcome theses deficiencies.

TRAINING AND DEVELOPMENT

When I entered the debt collection industry in 1979 training was the most important thing emphasized by management. In fact the job I applied for was not title debt collector it was entitled “management trainee”. The company made every effort to make sure every employee was able to move up the ladder with promotions. As you moved into management the biggest emphasis was in training a replacement for yourself so you can move up.

Training and development plans seem to have lost the war with the annual budget. you do not have a trainer much less a superior training program. Between 2000 and 2007 the industry quit training and instead created a bunch order takers. Times were good, collections were high and the need for a highly trained staff just didn’t seem to make sense. In 2007 the very best US trainers left the country headed to India where they have a desire to learn. Many of those traders are still there.

Most US call centers have not gotten back to a training mentality to date. The use of a scorecard for every staff member helps to identify deficiencies and training opportunities. The only way to develop a team is to understand their deficiencies and create training programs to combat them.

AUTOMATION OF PROCESS

I find that most collection agencies and especially law firms prefer to do many tasks manually. In many cases they know that the task could be performed in an automated fashion but they just resist the change as they are afraid of their software. Yes afraid of the cost, the hassle the time and money.

By showing them how to embrace their systems and in some cases adding systems to get the job done they are able to get tasks performed in a error free environment.

CLEAR COMMUNICATION

Most owners and CEO’s think that everyone is on the same page as they are but seldom is that the case. Type A people tend to think the word is either following along or already on board with their ideas. Therefore they do not make an effort to share their goals, direction and thoughts.

Simple things like a mission statement printed and framed can help this. Company newsletters and town meetings also help drive engagement from the top down. I have help to set up these types of communication in many engagements and the results are tremendous. The staff are glad to understand the direction of the company and the CEO now knows that the company is all headed the same direction, together!

STAFFING

One the main reasons I have to do an onsite evaluation of new consulting clients is to evaluate the staff and management. If I just ask questions online and sent solutions it would not work as the people getting the blueprint may not have the skills to enact the plan. The plan has to be customized to fit their skill sets.

Often I find that staff that is considered as under performing is just in the wrong job or has not been properly trained. Often I find management that is underperforming and being over paid. All of these are opportunities to help the company to make improvements and increase profits.

If you think that one or all of these things exist in your operation the next step is to pick up the phone and talk with me free of charge to see if I might be able to help you increase profits and improve strategies. Phillip w. Duff CEO Lighthouse Consulting 904-687-1687

Do you want to control your companies online reputation on all the top consumer review/complaint websites?

Lighthouse Consulting aggregates your good and bad consumer reviews from over 100 websites like Facebook, BBB, Twitter, Pissed Consumer and Google so your company can easily monitor what your customers are saying about you — in real-time!

You can hear every word stated about your business on Social media. Lighthouse Reputation Beacon is a service that automatically sends a review request to your company or the CEO’s cell phone, scoring new reviews for your business directly on Google and Facebook.

Lighthouse Reputation Beacon aggregates your reviews from top review sites. See what consumers are saying about your agency or law firm, in real-time.

With Lighthouse Reputation Beacon, your business can manage negative reviews with easy-to-use tools to address customer feedback quickly.  Your companies great reviews are collected from major sites are indexed by search engines for higher search ranking

Your positive reviews are auto-published to Facebook, Twitter, website, custom review site and 50+ consumer site.

You can generate a steady flow of positive reviews from your happy customers, via mobile, check-in, SMS & email campaign. And all the aggravated reviews are sent to you in real time so you can take action immediately.

With the Lighthouse Reputation Beacon, your business is found by search engines — accurately and up-to-date — across all the major consumer sites.

Lighthouse Reputation Beacon will generate and download ROI reports showing growth in reviews, ratings, traffic and ROI to support business decisions.

This service is very affordable, to learn more call Phillip W. Duff at 904-687-1687 X 101.

Is Your Payment Website going To Penalized By Google?

Google wants the web to be traveling over a secure channel. That’s why in the future your Chrome browser will flag unencrypted websites as insecure, displaying a red “x” over a padlock in the URL bar. If your payment site is not secure your site can be labeled as non-secure by Google and this could stop your revenue stream.

Lighthouse Consulting provides marketing services to many companies in the ARM industry and we have many programs to make sure your technology is advanced and able to handle todays consumer actions with ease and securely. This is why we felt it important to notify the rest of the industry as we now most of you have no idea of these types of changes till they have been impacted by the changes.

With this upcoming change in Chrome, Google makes it clear that the web of the future should all be encrypted, and all sites should be served over HTTPS, which is essentially a secure layer on top of the usual HTTP web protocol.

Starting in January with Chrome 56, password or credit card form fields on non-encrypted sites will be labeled “not secure.”

In following releases, those warnings will be extended by labeling HTTP pages as “not secure” in Incognito mode, where users may have higher expectations of privacy.

Eventually, all HTTP pages will be labeled non-secure, and the HTTP security indicator will change to the red triangle/exclamation mark that Google uses for broken HTTPS.

If your current website host or marketing team needs a professional edition then call Lighthouse Consulting today and ask for Phillip W.Duff at 904-687-1687 X 101.

Hey Phillip, How do I become successful in the collections field? This was a recent question posed to me recently.

Years ago that was easy for me  to answer and hard to do, now its hard to answer and even harder to do. But there is a clear path to success in 2017 in the debt collection industry its just a big wide, steep road with lots of pot holes that can swallow your whole company so pick the correct lane and do not just follow the car in front of you.

So as a consultant to the ARM industry people ask me often why I do not open my own collection practice and the simple answer is people. Managing people is the biggest problem of every client I have ever had with more than 2 people. But I do believe I have the blueprint to  be successful in 2017 in the ARM industry as a collection agent.

The first thing imperative to success is the people, second is the technology and lastly is the consumer experience. Yes, the debtors experience dealing with your agency or law firm is very important these days.

The People

The staff in a collection operation are very important even though in most cases they are not highly paid. The staff that are actually talking to the consumers are task with producing all the revenue in the old collection strategy. A company of 20 had 12 collectors who had to generate all the revenue to pay the 20 staff, overhead, vendors and the owners profits.

In a newer strategy the collection staff are still burdened with producing most of the revenue but now there is a silent collector who ask for no wages, the payment website. (More about this in Technology)

The collection staff are also task with compliance which is a big task these days one that technology can help immensely. But the support staff are very important in the new and old strategies as every dollar spent by the support staff must be recovered 5 fold by the collection staff and technology.

The biggest problem I see with companies is a lack of training and development programs by the company. The second biggest problem is a person with a golden umbrella within the organization. This can fall into two categories 1) the person is a relative, friend or some connection that the owner refuses see all the faults in and even when confronted with the damage they create still refuses to even discipline the person, much less fire them. 2) Or is a person who is making much too much money due to the length of service to the company. This is stopping the company from hiring 3 new hires, or buying new technology, or just making money.

All the above equal people problems.

The Technology

This is now the new compliance officer and the silent non commissioned collector. If you have a modern software package you should be using it to create compliance by only showing accounts to staff when it is proper to call them, to count contacts, limit letters, to create automation of many tasks and much more. Technology from collection software to your IVR all all now very important to the multichannel collection strategy required in todays electronic world.

You must be sending emails, texts, voice mail drops, calling, letters, IVR and pushing the consumer to self cure at your payment site with every channel. So technology becomes the 24/7 collector as the pay site gathers revenue at Midnight and beyond.

The Consumer Experience

This is a part of the business that is overlooked or over focused in recent years. This includes both the clients experience and the debtors experience dealing with you. As you see from the technology section we are trying to drive that consumer to self cure at our payment site so that consumer experience is very important. You must build a comprehensive pay site that is easy to authenticate for the consumer and then easy to navigate to payment, usually a <6 click navigation.

Also the tone and look of the letters, pay site, voice mails, callers, company website and emails have to create a positive consumer experience.

If you can get the right people, working the right technology and creating the right consumer experience you will succeed in the ARM industry, if you need a guide please call me.

The one thing you can’t afford to do in todays environment .

Here is a quote from Steve McQueen in the Magnificent Seven

“You remind me of a guy who fell from the 10th story of a building, he was heard saying as he went by each floor.  “All good so far.“

Well maybe I gave that away to easy but yes the answer is be complacent or to do nothing. You cannot sit around waiting on anything anymore. Business cycles move at much higher rates due to the movement of information via the internet. If you sit still for a just one minute you have lost your space in line.

But I guess the real question is what should you be doing? Well thats a three part answer.

If you are an creditor, agency or law firm in the business of debt collection you need to first find cost reductions that do not reduce the service you provide to your client. Better labor at reduced costs, better technology, automation and improved processes.

Secondly you must find to create stickiness to your current client base. Give them more or give them something no-one else can or does. It is that level of service that will determine the stickiness you have with that client.

And that does not mean just meet or exceed their KPI’s, sometimes it means telling them their KPI”s are misaligned or too high to too low. Far to many companies are afraid to tell their clients how they think the money can best be recovered instead they work towards KPI’s that will NOT provide the best results.

Lastly you will need to find or create new business lines and new lines of revenue. You will have to step outside you box and look at things differently to get that perfect client base. You must look at business acquisition differently. Social Media and the internet are now how you will introduce yourself to the next prospect.

Lighthouse Consulting can help you do all of these. Yes even the marketing, actually we do lot’s of marketing and sales assistance in the ARM space.

The 3 Most Ask Questions About Agents in Jamaica

While I have been speaking to people regarding opportunities in Jamaica I have been getting the same three questions over and over so I thought I’d like explained them here.

The first question that is pondered is can you understand the agents? My answer is clearly yes. The first time I went to the island as an auditor for Bombardier Capital the language skills were very good along the call center workers yet there was a clear accent among other Islanders including resort workers.

Here is a link to a redacted call from a recent (August 2016) collection call from a Jamaican call center in Montego Bay. 

Over the last decade even those accents have diminished tremendously. I’ll tribute a large majority of this to the fact that the island started receiving Cable channels from the US and Canada about eight years ago. So they are watching the same channels you are in Fort Lauderdale, Chicago, Montréal, Los Angeles and Miami. This exposure to used car commercials and endless reruns of Seinfeld has changed their language skills and understanding of the US economy.

The second most ask question is do they have the infrastructure to handle my Technology needs. The answer to that has been yes for many years. Initially most of the infrastructure for call centers doing business on the island was created by the government in an area called the free zone. Nowadays the same infrastructure exist throughout the island but especially in Montego Bay and Kingston.

The final question everyone ask is is it safe? My answer is you’re just as say in Montego Bay as you are in Miami, Chicago, Los Angeles or most larger cities in the United States or the world. Jamaicans really want to be Americans therefore their attitudes towards foreigners are very positive. The Jamaican government makes sure there are only a limited amount of visas issued to the United States as it fears there might be mass exodus if borders were oped wide. I have traveled many places in the world and most places they do not like Americans, one of the reasons I have been traveling back to Jamaica over the last decade is the Jamaicans positive attitude towards Americans.

The ONE reason you can’t lose with a Jamaican BPO

Most people first think about near shore or off shore BPO when they are looking for better labor rates but they may be missing the biggest reason to use a BPO in Jamaica.

When you begin to look for better labor rates you are first lead to off shore options like the Philippines or India and when you get further into your due diligence you discover the labor rates are not as good as you were looking for, even though much better that what your paying in the USA.

As your research leads you to near shore operations you see more value for your dollar with the Caribbean workers. You find many English speaking countries with nice Universities and a labor force that desire to have a job not a labor force that feels entitled to work and benefits.

St Lucia, the Dominican Republic, Aruba, Puerto Rico all have BPO operations and the BPO call center crown jewel is Jamaica. Why Jamaica? The biggest reason is the exchange rate, yes the exchange rate. Yes the workers are priced appropriately, they are effective and experienced, they have excellent verbal skills and work ethic but the largest reason is the US$ to JD$ exchange rate.

“The value of the Jamaican dollar has depreciated by 4.8 per cent for the financial year to date compared with a depreciation of 3.2 per cent for the same period last year.” See reference 

There was also a notable increase in the employed labour force by about 40,100 people. Overall, GDP at best is projected to grow at anywhere between 0.5 and 1.5 per cent on average for the entire year”. See reference

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Where is Waldo Calling from? Near shore or Offshore. Where should you place accounts and BPO work?

There have been a lot of discussions over the last few months with my clients and in the media about collection agencies and creditors moving work offshore. The BPO (Business Process Outsourcing) biz is growing due to the reduced profits and squeezing of contingency rates that the industry is experiencing. The question is WHERE DO I PLACE MY BPO?

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So let’s explore the options, we have India, Philippines, the near shore Caribbean and Mexico.

Let’s start with India the labor force is large and well educated, but the language skills and understanding of US customs is very bad. The cost to rent a seat has increased steadily since 2007. It is my opinion that India is best used for highly skilled BPO such as computer programming, Remote hardware management and other skilled trades. Another problem is the time it takes to go manage the team or do training, 20+ hours from Washington, DC

Next is the Philippines, many people moved from India to the Philippines over the last 3 years. The language is better than India, but still a challenge. Their understanding of US culture is better, but still lacking. The cost was great till the last year, as costs have taken a sharp rise recently, doubling in many cases. The ability to pop in is also quite an investment as its 18 hours from Washington, DC. The skill set is good for most daily tasks like call center work and data entry, but the cost is becoming too high quickly.

Mexico has been a option for many years and most call centers are conveniently located right over the US border. Please call centers serve as bilingual call centers and the English skills are very good. Their knowledge of US culture, it Is obviously high. The difficulty is the cost of those employees has been high for many years but is very effective. This is a great Choice for US call centers they are based in Texas, Arizona, New Mexico, California.

Ok the Caribbean has been a hot spot for 20 years with the change from textiles to call centers in the Free Zone in Montego Bay, Jamaica. Now Costa Rica, Puerto Rico, Dominican Republic and St Lucia to name a few are in the call center biz. The labor costs in the islands is steady and the English is very good as many islands speak English as the primary language. The ability to manage the staff has been better as its just 2 hours from Washington, DC to Montego Bay, Jamaica or Santa Domingo. Most of the islands have a good understanding of the US culture and places like Jamaica get Cable TV from Miami, LA and Montreal, Canada. This has helped the work force become more accustomed to US culture, language and even slang terms. The skills are mainly called center oriented, but the ability to hire highly skilled labor are better in places Like Kingston, Jamaica and San Juan, PR where the large Universities are located.

So where should you place your BPO business? My answer is the near shore Caribbean if its call center work. I prefer Jamaica but that is a preference of mine as I know the people and have been going there since my first visit as an auditor for Bombardier Capital in 2000 to audit Alliance One a Philly based operation that had some of my files at their Montego Bay call Center.

If you desire to know more about near shore Caribbean call centers, call me at 904-687-1687 X 101

Phillip W. Duff

Jamacian Call Center News

One of the services provided by Lighthouse Consulting is near shore call center management, consulting and agency set up, particularly on the island of Jamaica. So in order to better educate my US call center operators I will start providing information about call centers that are involved in debt collection, debt settlement or other ARM services in Jamaica.

an overturned boat on the beach in the Caribbean. Boat is painted "Rasta" colors.

an overturned boat on the beach in the Caribbean. Boat is painted “Rasta” colors.

Let’s start by giving you some information. Jamaica is a major call center destination receiving and making calls around the world to English-speaking countries. Call centers handle everything from Pizza delivery orders in Montréal, Medicaid healthcare products sales, Cable TV sales, debt collection and many other projects. There are tens of thousands of trained call center workers in Montego Bay and Kingston. Vistaprint has they’re only worldwide call center in Montego Bay and is one of the major employers of the city. Delta, Fingerhut, American Airlines, Insurance companies and many more all use call centers on the island.

I first came to the island as an auditor for collection accounts that were placed in there with Alliance One in 2000. So as you can see the island has a long history of debt collection. In future articles I will provide information on some of the call centers that currently exist on the island and how they may Bring value to your debt collection operation. With the average wages for a trained bill collector in Jamaica equaling half that of the US and similar results, the ROI is easy to caculate.

Reasons to use a Call Center in Jamaica

English is the primary language 

Accents are mild and pleasant

Jamaica is a call center hub

Favorable wages 

ROI is high VS USA staff

Close to manage (1 hour flight from Miami, 2 hour flight from D.C.)

Work lower unit yield accounts at a profit

Data entry and admin functions

Insurance reps

Transfer agents

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