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AGENDA • Welcome • OBJECTIVE • Warm Up • Presentation • Practice activity
Objective: By the end of the lesson, students will be able to performance outbound call collections, in order to connect with the consumer and validate the payments and all the implications of products and services, in the call center practice by the realization of exercises and practice.
Definitions: CollectionCallmeans a telephonecall placed forthepurposedofattemptingtoobtainorencouragepaymentofanyfinancialobligationormoniesowed. Debt collection is the process of pursuing payments of debts owed by individuals or businesses. An organization that specializes in debt collection is known as a collection agency or debt collector. Most collection agencies operate as agents of creditors and collect debts for a fee or percentage of the total amount owed.
Learn About Your Legal Rights The federal Fair Debt Collection Practices Act (FDCPA) (15 U.S.C. §§ 1692 and following) limits what collectors can and can't do. For instance, this law prohibits debt collectors from using obscene language or threatening you with violence if you don't pay. It also sets limits on when and where the collector can contact you, prohibits collectors from communicating with others about your debt, with a few exceptions, and more. Some states have similar laws that provide even more protections than the federal FDCPA. If the collector crosses the line and violates the law, you might be able to use the violation as leverage in settlement negotiations.
Debtors: The person who owes the bill or debt is the debtor. Debtors may fail to pay (default) for various reasons: because of a lack of financial planning or overcommitment on their part; due to an unforeseen eventuality such as the loss ofa job or health problems; dispute or disagreement over the debt or what is being billed for; or dishonesty on the part of either the creditor or the debtor. The debtor may be either a person or an entity, such as a company. Collection of consumer debt is subject to greater regulation than the collection of business debt.
Typesofdebtcollector: There are many types of collection agencies. First-party agencies are often subsidiaries of the original company the debt is owed to. Third-party agencies are separate companies contracted by a company to collect debts on their behalf for a fee. Debt buyers purchase the debt at a percentage of its value, then attempt to collect it. Each country has its own rules and regulations regarding them.
First-party agencies Some collection agencies are departments or subsidiaries of the company that owns the original debt. First-party agencies typically get involved earlier in the debt collection process and have a greater incentive to try to maintain a constructive customer relationship.[6] Because they are a part of the original creditor, first-party agencies may not be subject to legislation that governs third-party collection agencies. These agencies are called "first-party" because they are part of the first party to the contract (i.e. the creditor). The second party is the consumer (or debtor). Typically, first-party agencies try to collect debts for several months before passing it to a third-party agency or selling the debt and writing off most of its value.
Third-party agencies A collection agency is a third-party agency, called such because such agencies were not a party to the original contract. The creditor assigns accounts directly to such an agency on a contingency-fee basis, which usually initially costs nothing to the creditor or merchant, except for the cost of communications. This however is dependent on the individual service level agreement (SLA) that exists between the creditor and the collection agency. The agency takes a percentage of debts successfully collected; sometimes known in the industry as the "Pot Fee" or potential fee upon successful collection.
WhatNOT TODO ifyou are a debtcollector: Link: https://www.youtube.com/watch?v=KJS9c0jgosQ
How To Make The Perfect Collection Call Making collection calls is never easy to do. No matter how long you have been doing it, there is always someone that ends up throwing a curve ball and you simply don’t know how to respond. The best way to handle this possibility and lose your fear of collection calls is to prepare ahead of time. We’re going to cover five easy steps to help you prepare for each collection call and collect what you’re owed on every one.
Prepare • In order for any call to be effective you need to have relevant supporting information readily available to ensure the call is efficient, professional, and productive. You also need to have a goal for the call; your goal could be to get specific information, to get the customer to commit to taking some kind of action, etc. What to have in front of you before picking up the phone: • The invoice(s) you are calling about plus any supporting documentation (proof of delivery, purchase order, etc.) • Notes from prior contacts regarding this invoice (if any). • Customer account status such as other open invoices and past payment history. • Customer contact – who to call and their phone number. • A smile. Even though your customer cannot see you, a smile on your face automatically makes you sound more cheerful and it’s proven to elevate your mood! A/R is just as much a customer service role as it is an accounting role, being pleasant is just another way to enhance the relationship and give them a reason to help you get this invoice settled.
2. Making the Initial Call • This is your first contact with a customer regarding a past due invoice. You will have already sent the invoice and possibly a past-due reminder by mail or email. The objective of this call is to determine the status of the payment and identify any issues that may be delaying that payment. In your own words introduce yourself and cover the following points: • The invoice number in question. • The amount due. • The due date. • If they say payment is in the mail, ask for the date it was mailed and the check number. • If the payment has not yet been sent, confirm that they have the invoice, that there are no problems, and ask when the payment will be sent. • Be sure to fully discuss any problems with the invoice and what will be done to correct the problems. • Set a date for when to expect payment • Always be sure to get the name and title of the person you talk with.
3. Take Notes Record notes of the key points of the call including the time and date as well as any promises made by the customer. Without proper notes on each call, it’s likely that you will spend a majority of the phone call just trying to familiarize yourself with the customer and their account status. Not only is this a waste of time, but it leaves the customer with a feeling that you simply don’t care much about them or their payment. For help with taking notes and keeping track of them, consider using an accounts receivable software that has note taking built-in for each individual customer account.
4. Have Prepared Responses Customers often have excuses for why they haven’t paid yet, or they have an issue with the invoice that they need fixed. You should be prepared to deal with these excuses and know what you are going to say. Some of the most common excuses for not paying is never having received the invoice. If you customer says this, stay on the phone with them while you send another email and confirm with them when they have received it. Another common reason that an invoice goes unpaid is because the invoice is incorrect. Make sure that you fix any issues while you are on the phone with them, instead of hanging up and trying to get a hold of them again.
5. Follow Up As soon as you are done with your collection call, send the customer an email recapping what you just discussed, including any promises to pay. If after your first collection call you have yet to receive payment, be sure to call them again. In this call, you will want to remind them of their promise to pay and ask again why they haven’t. Remind them of the consequences of non-payment, such as reporting to credit bureaus or possible legal action. Making collection calls can be tricky. You never know what kind of response you may get on the other end of the line. However, if you stay prepared and focused you will likely resolve any issues and get paid immediately. Most customer don’t like being past due on payments, so your collection call will spur them to action.
Agency: A business or organization established to provide a particular service, typically one that involves organizing transactions between two other parties.
Credit score: Is a measure of an individual's ability to pay back the borrowed amount. It is the numerical representation of their creditworthiness. A credit score is a 3-digit number that falls in the range of 300-900, 900 being the highest.
Debtor: A debtor is a company or individual who owes money. If the debt is in the form of a loan from a financial institution, the debtor is referred to as a borrower, and if the debt is in the form of securities—such as bonds—the debtor is referred to as an issuer. Legally, someone who files a voluntary petition to declare bankruptcy is also considered a debtor.
In-house: Something that is done in-house is done within an organization or business by itsemployeesrather than by other people.
Legal: The definition of legal is something connected to law or a government’s system of rules.
Overdue: Not having arrived, happened, or been done by the expected time.
Payment Arrangement: Payment Arrangement means a contract under which the Company agrees not to terminate Service for a failure to timely pay Amounts Due, provided that the Customer remains current on future charges and makes periodic payments on the delinquent Amounts Due.
Third-party: A third party is an individual or entity that is involved in a transaction but is not one of the principals and, thus, has a lesser interest in the transaction. An example of a third party would be the escrow company in a real estate transaction; the escrow party acts as a neutral agent by collecting the documents and money that the buyer and seller exchange when completing the transaction.
