A self-described “story with an interesting twist” caught my eye last week. I follow Mike Gibb’s blog, Daily Digest, on AccountsRecovery.net. On 2/19/14, his “twist” was “A collection agency is standing up on behalf of a debtor against a creditor.” A click on Gibb’s “read more” link led me to a Public Citizen, Consumer Law & Policy Blog posted 2/18/14. Their post began, “We don’t often have occasion to praise debt collectors on this site, so it’s worth taking note when a debt collection company does the right thing.” Having worked in the debt collection industry for more than 20 years, I disagreed completely with the implied premise that a debt collection company doesn’t often do the right thing or deserve praise for what they do. My years of experience with collection agency and law firm owners and managers, debt collectors and attorneys, has been just the opposite. The people I know spend their days doing the difficult job of helping debtors find a way to pay their bills, and in the process, they help individual businesses and the economy in general in ways that we don’t often read about. I see that as the rule rather than the exception.
Praise for One Debt Collector
In the Public Citizen blog, the praise was for debt collector Fidelity Information Corp, the owner of the debt, said to be the result of an online retailer, KlearGear, trying to extort $3500 from a customer because his wife criticized the company online. When Fidelity was included in a suit against KlearGear, they did “an independent review of the case and reported to the credit agencies that the debt was erroneous,” because it was based on a “non-disparagement clause” which was unenforceable. The erroneously maligned “debtors” voluntarily dismissed Fidelity from the lawsuit.
The Debt: Collections Made Human
An online search for other sources of “praise for debtors” led me to an interesting little book, The Debt: Collections Made Human, by Bill Arnold, a former debt collector and now a Certified Speaking Professional. Thinking I couldn’t purchase the book in time to meet my deadline, I called Arnold and found that he personifies many if not most of the debt collectors I’ve had the privilege of knowing over the years. He graciously sent me a short summary of the advice in the book that he said I could share with our readers. He seemed especially pleased that I wanted to portray the debt collection industry in a positive light.
Bill Arnold’s “Friendly but Firm” Approach
I developed the “Friendly but Firm” approach to collecting. It provides the best possibility of collecting the account in full while retaining the good will of the debtor. My approach to collection left debtors liking me and hating the fact that they did not pay their bill. My three-step approach is to:1. Create an atmosphere that opens lines of communication 2. Develop rapport by putting myself in the debtor’s situation 3. Motivate the debtor to act by selling the benefits of paying in full, and help him or her find a way to do it.
This approach became so successful that CSC Credit Services purchased my collection company. It provided me the opportunity to conduct over 2000 seminars with companies like Shell Oil, Bank of America, Wells Fargo, GE Capital and many other leading credit providers.
That same day, I found I could “borrow” Arnold’s book on my Kindle and started reading it immediately. The advice in the book is imbedded in a fictional story about a debtor and the collector trying to collect the debt with help from a wise boss. It’s a quick read that you might want to refer to more than once, but I’ll take the liberty of summarizing what I think are the most important ideas Arnold proposes and that are not that uncommon among the industry members I’m acquainted with.
Debt Collectors Are Not the Enemy
“We are not the enemy. We are protectors of a promise,” one of Arnold’s fictional characters says. “The collector’s job is not just to collect an old debt from an old customer. It is to do so in a way that encourages the old customer to become a new customer again. Collecting debt is simply a mutual exchange – The debtor’s happiness is in my pocket, and my dollars are in his pocket. To achieve satisfaction on both sides all we need to do is exchange.”
Treat People with Dignity
- Create an atmosphere of trust
- Listen politely
- Thank the debtor for explaining why he can’t pay
- Use Rapport-building phrases – I understand, I care, I want to work with you
- Express empathy
- Refer to the debtor’s explanation as a “reason,” not a problem or objection
- Verify all the “reasons”
- Break the ICE: find different ways to agree with Intellectual debtors, Circumstantial debtors and Emotional debtors
- Get in sync – find areas of agreement
- Sell security with positive reinforcement
Move Debtors from Not Paying a Debt to Discovering How to Pay a Debt
- Help debtors discover that they want to pay
- “I have no money” can be a positive response that opens the door
- Propose additional money sources:
- Payment schedule that differs from the original terms
- Additional loans (private from family or friends)
- Selling off assets or stocks
- Cashing in retirement and life insurance
- Hold a fund-raising drive
Praise for “The Debt”
When we take the time to allow people to tell us how they feel while building rapport and understanding their feelings, we can keep a loyal customer. When we do not take time to follow the principles of this book, we most certainly will not see that person again. Time and compassion are key to resolving disputes and this book gives good advice in those areas. Mike Biggers, Business Consultant
Bill Arnold has earned the highest designation of “Certified Speaking Professional” in the National Speakers Association. As a result of his business accomplishments, he received an honorary Doctor of Laws degree from Freed-Hardeman University. He is the author of three books. You can buy “The Debt” on Arnold’s website or on Amazon.com. Reading this book might help you be even better at what you already do.
By Marti Lythgoe, NL Editor