Here’s Why Credit Unions Need Collection Agencies
While a credit union can pursue a debt on their own, often times it’s better to hire a collection agency. Not only does it allow them to focus on their members who are in good standing, but it allows them to offer a better member experience, better products and to keep fees low. It’s win-win for all parties.
At a credit union, chasing debt often means shifting resources – such as staff – away from regular tasks or hiring more employees. In a tight labor market, it can be hard to find quality workers with the skills to work at a credit union and quickly get resolution. Hiring a collection agency offers credit unions access to expert collectors who get the job done.
Below are a few more reasons why it’s a good idea for credit unions to hire collection agencies to pursue overdue payments.
Community & Member Relations
Collecting a debt tends to be a sensitive issue. Getting an agency involved in a collection lets a credit union put a buffer between themselves and their delinquent members. This is especially crucial for credit unions with members who are also part of their community. If a collection agent is too aggressive in pursuing a bad debt, it can have a chilling effect on future business.
Because credit unions tend to want to keep doing business with members once they pay an overdue debt, using an agency can preserve their relationship with a member, making it easier for them to return. That’s why it’s especially important – not only to put distance between two parties – but to hire an agency that’s professional and treats members with respect.
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Obstacles to Collecting a Debt
Collecting a debt is no simple task. Collections are regulated, and navigating these regulations can be a headache for credit unions. Writing off a debt to a collection agency can relieve credit unions of this burden, and increase the likelihood of getting resolution.
Although it’s best known for regulating robo-calls, the Telephone Consumer Protection Act (TCPA) also affects debt collection by way of phone calls, texts messages and even faxes from collectors. The TCPA is enforced by the Federal Communications Commission and violation penalties can be thousands of dollars, which can eat away at any gains from collecting a debt. Hiring a collection agency shields a credit union from costly repercussions and hands off a debt to experts who know how to navigate regulations.
At CBHV, we train our agents in regulatory compliance. When a new collector joins our team, we administer training, then follow up with a monthly quiz to test their knowledge of client-centric info and regulations. In a year, an agent answers hundreds of questions. If they get one wrong, we retrain them in that area.
Go With the Agency Who Knows Credit Unions
At CBHV, our agents know how to collect for credit unions. They’re trained to use a variety of tools and tactics – such as payment plans or settlements – to get resolution while creating an opportunity for a member to continue doing business with the union. As an agency, we impress upon agents the value of striking the right tone of voice and to always approach a customer with the utmost of respect.
Our goal is to have a member pay an overdue debt voluntarily. Yet, we’re prepared and experienced to set in motion a lawsuit to get a resolution. If that happens, a credit union would sue based on an attorney in our network. At CBHV, we manage a national network of attorneys who specialize in legal collections, and we can forward a delinquent member’s account to them.
If you’d like to work with a collection agency that knows credit unions and knows how to get resolution, give CBHV a call.