Wife and husband looking at their billing statement

Adapting Your Credit Union’s Collection Approach to a Post-Pandemic World

By: Wendy Elieff, SVP, Client Service and Marketing, TriVerity & The Loan Service Center

As we come out of the COVID-19 pandemic and continue to adapt to changing economic conditions, it is difficult to predict when, or how quickly, a member’s financial picture will recover. Even after rounds of stimulus payments, industry experts suggest that credit unions will continue to see inconsistent payments from members with delinquent accounts. Aite Group’s recent annual survey of the third-party debt collection industry reports that, when looking out to the next six to 12 months, 62% of collectors anticipate more of a challenge. In addition, nearly half of collectors report that major new requirements — such as those concerning business continuity, movement to the cloud for greater flexibility and new security protocols — are on the horizon.

These collection challenges are partly due to governmental agencies curbing collection efforts in response to the pandemic. According to a recent article in The Financial Brand, “Deferral and forbearance programs have delayed the inevitable tidal wave of delinquencies and defaults.” The article stresses that collection departments delivering an exceptional member experience are more likely to be paid first.

A collector’s job is to help members pay off their debts by negotiating a win-win for the credit union and member. The best collector will offer kindness and respect to the member’s financial situation, but will be persistent in working through payment options. In order to do this effectively, a firm grasp on new collection laws and industry best practices is essential, as well as maintaining a trusting relationship with the member.

Communication of an intent, such as “I want to help you on your journey to get out of debt,” should be clear to the member. Below are some helpful service tips that can help your credit union collectors during this time of transition.

The Impact of Tone and Timing

  • Focus on the member when speaking with them over the phone. Don’t multi-task; the member will be able to tell if you are not fully focused on them.
  • Pause before answering a specific stall or objection. That allows both you and the member to consider alternatives.
  • Don’t let confidence overshadow sensitivity. As a collector, you may know exactly what you’re doing, but your member may be new to dealing with debt.
  • Be direct as well as empathetic, personable and conversational with your member, but remember to focus on the goal of repayment.
  • Your tone, pitch, inflection and even the speed at which you talk can have a powerful influence on your listener.
  • Smile while you talk. Even though the member on the other end of the line can’t see it, they will hear it in your voice.

Offer Flexible Payment Options

  • Have a clear set of payment options or arrangements for members. They will feel more confident about their situation if they have some flexibility with their payments during times of economic hardship or an unknown future.
  • Consider offering the member flexibility to plan payments around their cash flow. This could minimize the risk of a failed payment due to insufficient funds.
  • Consider providing members with tips on creating an updated budget to transition from COVID-19 relief into a more traditional repayment plan.

Success in today’s collection environment requires creativity, a commitment to the member relationship and a sharp eye on changing collection laws. Optimal efficiency will depend on adapting with a fresh approach to every nuance while engaging members in cost-effective ways that meet current consumer preferences.

Wendy Elieff oversees the success of the Client Service and Marketing teams in TriVerity and The Loan Service Center, a PSCU subsidiary. Wendy has worked for TriVerity for the past 22 years. She is responsible for developing, implementing and monitoring cohesive marketing strategies to increase brand awareness. She is also responsible for building and maintaining client relationships by staying abreast of and responding to changes in the credit union marketplace.