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Unfortunately, this is the new reality with regard to debt collection. According to the most recent statistics from the NCUA, average delinquencies at credit unions have risen nearly 200% since 2006, while charge-offs have more than doubled.
The days of being successful with passive, low-touch collection practices are over. If you want to dramatically reduce delinquencies and charge-offs, you need an aggressive, comprehensive plan for attacking your collection problem. Desired results do not generally materialize if you simply choose the low cost provider because their focus seems to be only about being the lowest cost provider rather than being focused on results.
After you make the decision to get serious about collections, the next step is to decide whether to tackle this problem internally or to enlist outside resources. An internal solution may require adding personnel along with all of the peripheral tools necessary to ensure the success of your people: training (both initial and ongoing), work space, benefits, adequate supervision - to name just a few.
More and more credit unions are turning to the Collections Outsourcing program from Lending Solutions to get delinquencies and charge-offs under control. With LSI, you get a customized solution crafted specifically to meet the unique challenges of your organization and your members. Here are some of the program highlights:
- We use your collection policies, make calls in your name, enter notes in your own collection system, and set up a toll-free number for callbacks that we answer in your credit union's name.
- We are a first party collector which results in transparency; the member feels that they are speaking directly to the credit union.
- We do not use an auto dialer. There are no delays or "dead air" when our calls are received, which minimizes possible hang-ups.
- We work accounts with any age of delinquency (up to 120 days) or loan types, with the exception of those that have gone into legal proceedings.
- We use a professional, persistent, and consistent member service approach to produce a positive impact on a credit union's overall bottom line results.
- All of our collection clients are credit unions. We are very conscious of the importance of the member relationship, and our goal is to collect the debt while retaining the member.
Contact John Dowling at jdowling@lendingsolutions.com or 800-937-4249 x3273 today to learn more about our collections services. Be sure to check out some of the incredible results we have helped our clients achieve by visiting our case studies page online (see the McCoy FCU story in the sidebar for one example).
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Client: McCoy FCU
Orlando, FL
LSI Service: Collections
Background:
Like most credit unions, McCoy was facing rising delinquencies and charge-offs over the past few years. Late in 2009, they decided to funnel a larger portion of their delinquency portfolio to LSI.
Results:
A 45% reduction in delinquenices during the first four months of 2010, representing nearly $5.7 million dollars!
Client Feedback:
"Since entrusting a larger portion of our portfolio to LSI, we've been very excited about the results that they have helped us achieve. With the current economic realities, credit unions have to spend money to save money when it comes to debt collecting." Kevin Freeman, Vice President, Loan Services
To view our full portfolio of client success stories, visit www.lendingsolutions.com/case-studies.
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