The American Collectors Association has conducted a number of studies on banking, write-offs, and human behavioral science that have aided in a better understanding of bank debt collection. An overview of the results of these studies can help a bank achieve better results in debt collection.
Half of customers facing bank debt collection procedures choose not to pay their delinquent debt, despite having the ability to do so. What this means is that persistence is vital, since many customers who can pay eventually will.
And the sooner the pursuit is begun, the better. Most customers who have one delinquent account have many, and bank debt collection agents will be lining up to recover the lost funds. Starting early puts your unpaid account at the front of the line. Also, delinquent accounts between 60 and 150 days old are harder to collect, with success rates by debt collection agencies dropping 49%. Reaching the client sooner is always better.
Finding alternative methods of bank debt collection pursuit is an ideal strategy. Calls are often ignored and, according to studies, 80% of all successfully collected accounts by debt collection firms are recovered through letters mailed.
If you look at human behavior in general, it's no wonder. After all, while collection calls for delinquent payments are ignored, bills received in the mail for current accounts - phone, electric, etc - are paid. In behavioral science, this is labeled as perceived consequences for nonpayment, which are absent in the phone call but obvious in the letter or bill received.
You may also find that collection attempts begin to fail when bank debt collection attempts become too aggressive. Statistics show that, when collection agencies are not willing to negotiate affordable payments and are too insistent, success rates fall by 15-30%.
Of course, as stated, consequences are a motivator. Third party debt collection firms will report the debtor to the credit bureaus for failure to pay, which is why they are more successful in their recovery efforts than many internal bank debt collection resources.
Because bank debt collection is a science, formulating a plan of action can aid in building success. Recovering delinquent accounts is easier when a process is put in place based on an understanding of the debtor.
Half of customers facing bank debt collection procedures choose not to pay their delinquent debt, despite having the ability to do so. What this means is that persistence is vital, since many customers who can pay eventually will.
And the sooner the pursuit is begun, the better. Most customers who have one delinquent account have many, and bank debt collection agents will be lining up to recover the lost funds. Starting early puts your unpaid account at the front of the line. Also, delinquent accounts between 60 and 150 days old are harder to collect, with success rates by debt collection agencies dropping 49%. Reaching the client sooner is always better.
Finding alternative methods of bank debt collection pursuit is an ideal strategy. Calls are often ignored and, according to studies, 80% of all successfully collected accounts by debt collection firms are recovered through letters mailed.
If you look at human behavior in general, it's no wonder. After all, while collection calls for delinquent payments are ignored, bills received in the mail for current accounts - phone, electric, etc - are paid. In behavioral science, this is labeled as perceived consequences for nonpayment, which are absent in the phone call but obvious in the letter or bill received.
You may also find that collection attempts begin to fail when bank debt collection attempts become too aggressive. Statistics show that, when collection agencies are not willing to negotiate affordable payments and are too insistent, success rates fall by 15-30%.
Of course, as stated, consequences are a motivator. Third party debt collection firms will report the debtor to the credit bureaus for failure to pay, which is why they are more successful in their recovery efforts than many internal bank debt collection resources.
Because bank debt collection is a science, formulating a plan of action can aid in building success. Recovering delinquent accounts is easier when a process is put in place based on an understanding of the debtor.
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