FORT LAUDERDALE, Fla. — As the economy continues to impact credit card products, credit unions will have to fine tune their collections processes.
That was the message from Deb Taylor, senior director of credit card products, FIS, recently shared this information with attendees of a meeting hosted recently by CSCU.
"Credit losses are up to about 9% right now," she noted. "A lot of your members can't pay because they aren't employed right now."
"Be willing to work with them," Taylor advised. "In 1980 people had 10% disposable income. In 2007 it was .01%. People don't have money to tap into."
In 1998, the average salary was $50,000 with about $30,000 in credit card debt, Taylor noted. In 2005, it was $60,000 with $60,000 in credit card debt. In 2008, it was $63,000, with $75,000 in credit card debt.
"Credit unions have relationships with their members," she said. "Members feel connected to credit unions and will pay them first before other banks."
Early intervention is key, she said, when it comes to a member who may be falling behind in their payments.
"At five to 29 days, offer a friendly reminder," she said. "Update customer information. Discuss future payments."
Taylor also stressed counseling, instead of demanding. "Sympathize. Understand what is going on with these members," she said. "And if you choose to work with a credit counseling group, only work with a non-profit. It's important."
At FIS, its collection agents do not identify themselves as being from a collections agency. When calling, they identify themselves as being from the credit union. Taylor said that although collections can be done in-house, by outsourcing it to a place such as FIS, it allows the credit union reallocate internal resources.
