Solution Helps Attack Delinquencies Before They Become Write-Offs
ST. LOUIS, Mo.-Anheuser-Busch Employees' CU (ABECU) is making more than 45 collections calls per hour to members with early-delinquent auto loans, lines of credit and credit cards, helping to nip late delinquencies in the bud.
Better yet, the calls are triggered by targeted collections software that links members with multiple delinquent loans so that collectors can address total debt in one call, according to Virgil Mueller, VP-credit and collections at the $1.3-billion CU here.
The software is part of TotalCollections, a new solution from St. Petersburg, Fla.-based PSCU Financial Services. The solution combines automated, interactive calls with manned campaigns to help collect on any delinquent loan.
"TotalCollections is making many more phone calls and contacts than we could possibly make with the 10 people in our internal collections staff, and they can make the calls cheaper," said Mueller. Mueller said he could not quantify the difference in volume of calls or the difference for cost per call.
In June, TotalCollections made more than 7,000 early-delinquent collections attempts for ABECU, with nearly 370 successful contacts representing more than 1,200 accounts, Mueller said.
ABECU looks to TotalCollections to help reduce its growing number of early-delinquency loans, he continued. "No matter how we do the accounting, delinquencies go against our bottom line. We expect TotalCollections will stem the increase in early delinquencies so that our internal staff will be able to handle late delinquencies."
Early-delinquency collection calls weren't practical for ABECU before TotalCollections. "There are too many 10-day delinquencies for us to call," Mueller explained. About 400 to 700 loans are early-delinquent at any time, depending on the time of month, he said.
"We used to send them an automated letter," he said. "But calls act as the squeaky wheel to get the member's attention. The sooner you can get to the member, the sooner you can set up a repayment schedule."
ABECU sets the criteria for delinquent loans addressed by TotalCollections, with calls scheduled for auto and signature loans and lines of credit that are about 16 to 35 days delinquent, said Mueller. Calls scheduled for credit card loans are 10 days up to 55 days delinquent. All loans targeted have a balance of at least $700.
The CU uploads flagged accounts from its Akcelerant collections solution, where members are linked to multiple delinquent loans, into the TotalCollections solution for collections calls. "We can accommodate any credit union's collections system, however," according to Bryan Scalise, collections analyst at PSCU.
Automated calls with an ABECU-branded digital message are placed to members' home phones. In cases where no contact is made, live collectors determine whether to follow-up with calls to work or home numbers.
Whether contacted via digital call or a collections agent, members can choose to make a payment on the spot. "Our Smart Collection strategy allows members to make an urgency payment and give payment information over the phone," according to Donna Floyd, PSCU collection relationship manager. Alternatively, members can indicate they've already paid or promise to pay, and TotalCollections will automatically stop all calls to those members.
Automated calls eliminate busy signals and "dead air" for collections agents, said Scalise. "There's no unproductive time for the collector."
"In collections, you go through 10 to 15 dials before you even speak to someone," Mueller said. "That ties up my collections staff. Auto-dialed calls save the collector all that dialing time." If TotalCollections fails to reach the debtor, the solution tries again, about three to four times per day.
Although ABECU is seeing fewer early-delinquent accounts and a lower delinquency cycle in the two months it has used TotalCollections, Mueller said he's not sure whether to attribute the results to TotalCollections or economic factors.