By Jerilyn Smith | Focal Point Strategies Inc.
Let’s face the facts: the ARM industry is in turmoil. Scams, deception, and greed have brought attention to our industry, resulting in stronger legislation by multiple federal agencies. In turn, it makes it nearly impossible for us to do our jobs and to keep our doors open. What do we do to correct the situation? What can we, as managers and/or executives, do to prove to our government, clients, and consumers that not all participants in the ARM industry are “the bad guys”?
This post will look at three ways we can remedy the situation: (1) teaching consumer financial responsibility; (2) abiding by any and all compliance measures; and, (3) creating partnerships. Management must serve as the change-agents and adopt these attitudes within their own organizations.
Take the time to teach the consumer about financial responsibility
Financial responsibility is probably the biggest takeaway we have from our current economic situation. Many, though, are still in the dark about what financial responsibility is. Consumers are often overwhelmed, with little idea of what their next steps should be, or what resources are available to them to help get them back on their feet and on the road to a more secure financial future.
Phrases such as “What can we do to help” or “Realistically, how much can you afford towards this balance on a monthly basis” can help bring down the guard of the consumer by getting to the source of their concern and showing that there is a solution. Working with the consumer will more often result in the consumer paying the debt rather than working against them.
Compliance, Compliance, Compliance
Management must strengthen compliance guidelines for collectors. In our organization, a new collector must pass a Fair Debt Collections Practices Act (FDCPA) entrance test. If the applicant fails this test, he will not be extended an employment offer. Furthermore, every six months we test our collectors on the FDCPA to ensure they are staying abreast of changes within the law.
To give an example of why compliance is so important: in 2009, the FTC published an Annual Report regarding FDCPA complaints (www.ftc.gov/os/2010/04/P104802fdcpa2010annrpt.pdf). The total amount of complaints received by the FTC in 2009 between third-party debt collectors and in-house collectors totaled 119,364.
Additionally, when working with third-party collectors, it is a good idea to review the internal AR policies of your clients to avoid inheriting a legal problem. Take the time to sit and train your collectors every few months on new laws and/or amendments that exist in the ARM industry. Make fun activities that reward the collectors for not only obtaining the knowledge on their own but for retaining the information.
Create partnerships
Finally, there should be partnering of various organizations to positively promote the ARM industry. For example, a colleague of mine owns a financial services firm and recently asked me to speak to his group on the “Dos and Don’ts of Collection Agenices”. This kind of collaboration shows that ARM professionals want to ensure that consumers know their rights. It allows us to get in front of and redirect the negative images of us in the media.
We also all have a social responsibility to our community. There are ARM organizations that engage in philanthropic efforts. For example, J.C. Christensen and Associates, a business unit of Array Services Group, committed to donate $100,000 to the St. Cloud Hospital’s Women & Children’s Center in 2010. Array Services Group also has a corporate citizenship program which focuses on community service, healthcare, and education (www.arraysg.com/news_detail_st_cloud_hospital_donation.php).
These three ideas aren’t the end of the conversation – but they are a good start for all agencies who want to change the perception of the ARM industry in the public and in their own organizations.
ABOUT THE AUTHOR
Jerilyn Smith has worked at various organizations as a collector over the past 13 years. Due to her success in collections, she has trained other collectors and businesses. In 2009, she founded her own collection agency, Focal Point Strategies, Inc.
