NationsBank Corp. has installed new personal-computer-based software designed to manage credit card loan recovery by electronically linking card issuers to collection agencies.
Charlotte, N.C.-based Nationsbank, along with Boatmen's Bancshares Inc., St. Louis, served as test sites for the software, called Master Recoveries. The program is being marketed by MasterCard International to its members. It was developed by MasterCard and Lawnet Inc., New York.
The software allows banks to select specific problem accounts from their cardholder data base, according to Jeff Blumenfeld, senior product manager at MasterCard International.
After identifying accounts for recovery activity, Master Recoveries can then transmit detailed information to collection agencies and law firms. When the collector transmits information back to the bank, the cardholder data base is updated.
Keeping Tabs on Agencies
"The system enables us to do things like pull out all accounts of $500 or more over 90 days with Georgia zip codes and send it off," said John Short, assistant vice president at NationsBank Card Services in Norfolk, Va.
"When, information comes back to as from the agency, it's easy to see in a detailed way how different agencies are doing or what particular actions work beat in a specific situation," he said.
The system also reduces the need to keep paper records, since all collections and account activity are maintained on-line, a vital feature for NationsBank, which has $4 billion in its credit card portfolio.
"This makes it easier to pass accounts or transmit information between managers," Mr. Short said.
In addition to automating record keeping, the software enables MasterCard to immediately debit a collection agency's account and credit the credit granter's account when payments have been made.
"Everyone's cash flow improves, and operations are simplified," said Mr. Short.
During the product's test phase, NationsBank installed Master Recoveries at two collection agencies.
Mr. Short indicated that all the agencies that work with NationsBank would eventually be required to use the system.
Mr. Short also said NationsBank isn't planning to reduce staff because of the new software, but is using Master Recoveries to improve overall collection productivity.
He indicated that the bank is exploring the possibility of using Master Recoveries in other areas, such as collections activity for individuals who use closed or charged-off accounts.
"People have been known to take their closed accounts and charge items overseas or at merchants that don't electronically confirm information. It's a small problem and there's not a lot of money there, but there's room for improvement," he said.