Collection Industry Tries A Different Approach In A Rough Economy

The bill collections industry’s tactics may be taking a turn for the….better? Keeping in mind the amount of recent lawsuits against debt collection agencies, ACA International, the biggest trade group of professional creditors and collectors, says more and more collection agencies are working towards training collectors to take a more of an empathetic position.

Empathy might just be the answer that can turn the industry around. A lot of people in debt are being called by numerous collections agencies, and if they do have money, they aren’t going to want to give it to the aggressive threatening collector, they will give it to the person they can work with.

As agencies are working on training courses to include techniques on how to be gentler with debtors, a focus is being put on mentoring, coaching and counseling people who owe money, rather than aggressively threatening them. Trainees are encouraged to reflect on their personal experiences with collectors or someone that they know has dealt with them.

One recent trend has been to suggest that debtors speak with their parents or grandparents about taking out a loan against their life insurance policies or reverse mortgage against their house. The bill collectors who utilize this technique claim that our grandparents remember the Great Depression. They might not want this generation to experience that kind of pain and may be more prone to take a loan against the life retirement account or the life insurance policy.

Collectors who practice this philosophy think that it is in actuality a positive thing. They think that it doesn’t hurt anyone. If a person borrows against life insurance it may be preferable to borrowing against a 401(k) or a retirement plan. This is because the person will be counting on that money to survive.

Wrong or right, it would do the collections industry some good to evaluate its situation, and look for new innovative ways to collect in a suffering economy.

Mallory McGuinness works for a debt collection company. She also composes stories on business, finance, consumer spending and collection agencies.