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Maximising Recovery Rates in Consumer Debt

  • Published:
  • 95 Pages
  • Timetric

Synopsis

  • This VRL report examines different debt collection strategies used in different countries around the world
  • It looks at a variety of methods and strategies that are available to increase the rates of debt collection and recovery
  • It presents best practices in various countries and regions, including the UK, the US, Asia, and Central Eastern and South Eastern Europe
  • It also presents a number of case studies covering debt management techniques and technologies

Summary

During such difficult financial times, where the economic environment remains volatile, debt collection agencies can only rely on the methods and strategies that they employ to increase the rates of debt collection and recovery. Debt collectors are faced with a multitude of challenges: external economic pressure, consumers with rising delinquency rates who are also faced with multiple credit relationships, and increasing competition in the debt collection agency. Considering this, obtaining a deep understanding on the various strategies in collecting debt implemented in various countries is a must to help improve debt collection rates and contribute to a rapid recovery from the global economic crisis. Different countries address debt collection in a myriad of ways such as through field visits, a third party debt collector, buying and selling of debts, and regular and constant reminders via multiple communication channels. There are also some who utilise threats and send lawsuits. The wide variation of debt collection practises makes it even more important to study and analyse each one of them so as to obtain a deeper understanding of the debt collection industry, financial industry, and banking industry.

Scope

  • A global look at debt collection, with a focus on best practice, and also consumer behaviour and analysis
  • A specific look at the issues impacting growth and development - unemployment, salary and wage rates and credit demand
  • Numerous case studies from the US, which remains the most sophisticated market from a collector's perspective
  • The report is supported by numerous charts and diagrams

Reasons To Buy

  • This report is updated to take account of post crisis tools and technologies for collection
  • It provides information on global best practise in debt collection but also presents analyses of the cause and effect of each practise
  • It looks at debt collection both on a regional and a country basis
  • There is an increasing emphasis on data management in the form of the risk analysis of each account segment

Table of Contents

Executive Summary

List of Figures

List of Tables

1 The debt collection industry after the banking crisis

  • 1.1 The crisis affects debts and collections
  • 1.2 Pre-crisis credit growth
  • 1.3 The shifting credit landscape
  • 1.4 Banks and lenders turn to debt collection

2 Debt collection strategies and tactics call for new techniques

  • 2.1 Pre delinquency management
  • 2.2 The collection flowchart
  • 2.3 Analysis Contact
  • 2.4 Assessment
  • 2.5 Alternatives
  • 2.6 Monitoring Payments
  • 2.7 Managing a Recording System
  • 2.8 Further Communication and Follow-Ups
  • 2.9 Failure of Collections
  • 2.10 Delinquency stages and buckets
  • 2.11 Early Stage
  • 2.12 Mid-Stage
  • 2.13 Late Stage
  • 2.14 Charge-Off
  • 2.15 Lawsuit
  • 2.16 Risk based strategies for late collection
  • 2.17 Increased Target
  • 2.18 Automation of Collection
  • 2.19 Reduced Costs and Resources Incurred

3 Post crisis tools and technologies for debt collection

  • 3.1 The evolution of debt collection technology
  • 3.2 The debtor today
  • 3.3 Access Receivables management
  • 3.4 Technological requirements after crisis
  • 3.5 Post crisis technology for debt collections
  • 3.6 Credit Decisioning Programs
  • 3.7 Manual versus Automated Credit Decisioning
  • 3.8 Loan Portfolio and Debt Management Programs
  • 3.9 Components of Loan Portfolio Management System
  • 3.10 Loan Portfolio Management Review
  • 3.11 Risk-Based Segmentation
  • 3.12 Segmentation for Defining Losses
  • 3.13 Case Study #1 Benefits within Four Months after California Franchise Tax Board Automates its Decision Analytics System
  • 3.14 Case Study #2 Asset Management Company Tapped by California Hospital for Debt Recovery Strategies
  • 3.15 Predictive Diallers and Beyond
  • 3.16 Other Automated Dialling Techniques
  • 3.17 Integrating Technologies
  • 3.18 Maximising Other Communication Platforms
  • 3.19 Intelligence-Driven Communications Technology
  • 3.20 Case Study #4 Scotland Business Process Outsourcer MGt Utilises Automated Diallers to Increase Competitive Edge
  • 3.21 Case Study #5 Reintegra Utilises Data Mining Technologies to Track Non-Responsive Clients to Improve Debt Collection Ratio
  • 3.22 Recording and Monitoring Calls
  • 3.23 Improving the Collection Process through Technology: Introducing Speech Analytics
  • 3.24 Case Study #6 Hunter Warfield Utilises Call Recording and Speech Analytics to Ensure Compliance for Expanded Operations
  • 3.25 Tools for Payment Convenience and Flexibility
  • 3.26 From Web-Based Platforms to Virtual Collectors
  • 3.27 Virtual Collection Streamlines Collection Processes
  • 3.28 Case Study #7 Law Firm MVBA Increases Collection Rates and Returns, Reduces Collection Costs, through Online Site Credit Card Debt Payment System

4 Advancing Collection Management

  • 4.1 Defining company objectives
  • 4.2 Workflow management
  • 4.3 Management techniques to improve collector productivity
  • 4.4 Developing an incentives system for collectors
  • 4.5 Collector segmentation
  • 4.6 Eliminating distractions in the workplace
  • 4.7 Quality monitoring and compliance management
  • 4.8 More than Technology: effective management

5 Outsourcing collections and debt selling

6 Global best practises in debt collection

  • 6.1 Best practises in the United States
  • 6.2 Communication Technologies
  • 6.3 The use of Predictive Diallers in the United States
  • 6.4 Interactive Voice Recording
  • 6.5 Social Media Communication
  • 6.6 Centralised Debt Collection
  • 6.7 Increasing Consumer Confidence via More Updated Payment Options
  • 6.8 Best practises in the United Kingdom
  • 6.9 Debt collection management systems
  • 6.10 Recovering benefit overpayments
  • 6.11 Best practises in Asia
  • 6.12 Improved Reporting System and Information Flow in Singapore
  • 6.13 Proactive strategies to prevent delinquency
  • 6.14 Improving collection staff quality
  • 6.15 Employing tools for decision-making in risk-based collections
  • 6.16 Offering payment alternatives
  • 6.17 Other debt collection practises

6.18: Best practises in Central, Eastern, and South-Eastern Europe

  • 6.19 Multi-Channel Communication
  • 6.20 Collection at the right timing
  • 6.21 Competence of collection units
  • 6.22 Collection with a Third Party

7 Consumer and debt collection - clearing the dividing line

  • 7.1 How debt collectors become consumers' common foe
  • 7.2 Social media abuse by debt collectors
  • 7.3 Excessive and frequent harassing calls and contact
  • 7.4 Pursuing fraudulent debts
  • 7.5 Closing the ugly gap between debt collector and debtor

8 Challenges to the debt collection industry

  • 8.1 Information flow and data sharing
  • 8.2 Adjusting to the Influx of Changes and Innovations in Communication Technology
  • 8.3 Mobile Phones as Communication Tools
  • 8.4 Collecting Debt via Third Party Communication Tools
  • 8.5 Buying and Selling of Debt Portfolios and How It Affects the Industry

9 Debt collection industry outlook

  • 9.1 Central, Eastern, and South-Eastern Europe Industry outlook
  • 9.2 United Kingdom Industry Outlook
  • 9.3 United States Industry Outlook
  • 9.4 Factors That Generate Growth and Development in the debt collection industry
  • 9.5 Evidence of growth

10: Conclusion

List of Tables

  • Table 1: Credit Expansion Rates
  • Table 2: Quarterly Bankruptcy Filings
  • Table 3: Characteristics of Consumers Who are Bankrupts, Those Who Enter Debt Agreements, and Those Who have Entered Personal Insolvency Agreements
  • Table 4: An estimation of production by a contact centre solutions provider
  • Table 5: Estimated quantum of non-performing loan rates by country, 2008-2010
  • Table 6: Collections Scorecard Illustration
  • Table 7: Mobile Phone (Wireless Communication) Usage in the United States
  • Table 8: Seasonally Adjusted Unemployment Rates (%) Totals
  • Table 9: Median Weekly Earnings of Wage and Salary Workers in the United States, 2007-2011
  • Table 10: Key Statistics for the Top Performing Small and Medium-Sized Business Industries for 2011

List of Figures

  • Figure 1: Individual Insolvencies in England and Wales, 2001 Q1 to 2011 Q1
  • Figure 2: Capital Inflows from Western European Banks and the Surge of Private Sector Credit
  • Figure 3: Net Capital Flows, 2008-2009 (GDP)
  • Figure 4: Bank Credit to Private Sector, 2008-2010 ???
  • Figure 5: Pre-Delinquency Management Strategies in a Traditional Bad Debt Cycle
  • Figure 6: Sample Collections Process Flowchart
  • Figure 7: Collectability of Delinquent Commercial Debts at Time Intervals after the Due Date
  • Figure 8: Factors Utilised by Debt Collectors to Determine When to Send Claim
  • Figure 9: Evolution of Debt Collection Strategies Over Time
  • Figure 10: Credit Management Process
  • Figure 11: Interface between Internal and External Data Sources
  • Figure 12: An Example of a Traditional Segmentation Method
  • Figure 13: Example of a Risk-Based Segmentation Method
  • Figure 14: Communication Platforms Utilised by European Banks to Contact Debtors, by Preference
  • Figure 15: Productive Talk Time Rate between Manual and Predictive Diallers
  • Figure 16: Adult Users of Internet and Social Media in US, 2011
  • Figure 17: Social Media Use by Age
  • Figure 18: Monthly Voice and Text Usage by Age
  • Figure 19: Delinquency Rate in Singapore 2011
  • Figure 20: Key Success Factors in Debt Collection in the Individual Segment and Professional and Micro-Enterprises Segments
  • Figure 21: Bank Credit Growth
  • Figure 22: Non-Performing Loans in Central and East European Countries
  • Figure 23: Expectations of European Banks on Development of Delinquencies in the Retail Segment
  • Figure 24: Total UK Personal Debt in GBP Billion
  • Figure 25: Unemployment Rates in the Eurozone
  • Figure 26: United Kingdom Unemployment Rate
  • Figure 27: United States Unemployment Rate, Quarterly
  • Figure 28: United States Unemployment Rate, Monthly
  • Figure 29: Labour Costs per Hour in the Eurozone
  • Figure 30: Average Weekly Earnings for Regular Labour Pay
  • Figure 31: Average Weekly Earnings for Regular Labour Pay
  • Figure 32: Job Growth in the Debt Collection Industry in the United States
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