department -- figuratively, at least.

The bank used to do what most banks do: assign collectors to specific types of loans, with the idea that collectors are most effective when they specialize in a certain type of debt.

Collectors at two of the seven sites that handle collections for the Charlotte, N.C.-based bank have began doing sales as well, asking delinquent customers about several kinds of loans, including auto, personal, and home equity. The plan is eventually to have a single collector work with a customer one-on-one through most of the collecting process as well as on selling.

"We have to move away from the traditional way of doing business to tailor our collections efforts around customers rather than products," said Michael O. Radesky, senior vice president of Bank of America in Brea, Calif. The difference is "that we are collecting on a customer, not just an auto loan."

The only products that are not part of this initiative are mortgages and credit cards, but there are plans to bring them into the fold, Mr. Radesky said.

The idea is not only to recover the maximum amount of debt, but also to cross-sell. One of the first questions a collector might ask is whether a customer owns property, and therefore has some available equity. Bank of America might offer such a customer a consolidated loan that could be approved and set up within 48 hours.

"We are in the subprime real estate business, so we can easily put customers into those products," Mr. Radesky said.

To encourage its new way of thinking about collections, Bank of America refers to this still early-stage initiative as "relationship collections."Mr. Radesky said the bank has relationships with 33% of all U.S. households, but cross-selling is difficult because "there are still so many systems within the bank that don't talk to each other."

Bank of America is also installing new modeling technology that gives collectors a full picture of each customer's relationships with the bank and his or her past behavior. The technology prioritizes the debts, showing which accounts are most at risk of default and thus need to be worked first.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.