One of the most difficult things in debt collection has always been reaching the debtor by telephone and determining “Right Party Contact” before discussing the details of the debt. The problem of establishing right Party Contact with a debtor has existed long before current regulations like the TCPA came into existence. Years ago debt collectors worked the streets, going door-to-door, to make contact with the debtors who in most cases did not even have a phone. In these days it was common for a consumer to purchase items such as a major appliance and pay for the item over time. The seller or finance company would stop by the customer’s home each week and collect the current installment payment due. But if the customer wasn’t home at the time the collector stopped by, the finance company would miss collecting that week’s payment.
During the late 70’s, congress began regulating the practice of debt collection and with these regulations came new rules about how, when and where a debtor could be contacted. Given the technology available during this time, an average collector working a ledger card system and using a rotary dial phone might make 100-120 calls per day with a 20%-30% contact rate to the party responsible for the debt. This process proved to be incredibly inefficient, as the most highly trained staff were spending 70%-80% of their time involved in performing tasks that generated no revenues for the company.
One of the first companies in the debt collection industry to focus on optimizing right party contacts and collector work queues was GC Services. The company developed a unique model that split the collector workforce into two teams. The first team was tasked and trained to call the debtor and establish contact with the person responsible or the debt. Once right Party contact had been established, the call was transferred to the second team of more highly skilled collectors, who engage the debtor and secure payment. During this time, I worked as a collector at GC services and it typically took three to four individuals making outbound calls to keep my queue full of available debtors to speak with. Within a short time, we had increased the number of right party contacts made each day and reduced the cost of training in the first tier of the dialing strategy. This freed up their best and most valuable talent to do what they did best…collect more debt.
As anyone who has done collections knows the RPC is the most important thing in the collection process. Most collection staff spend 50-70% of their time just trying to get a RPC on the phone. This is why we skip-trace and ask everyone we speak to if they have a better phone number to reach the consumer.
Today, the myriad regulations pertaining to how, when and where you are permitted to contact a debtor have drastically reduced right party contact rates to levels between 5%-10%. As contact rates have steadily declined, so have profit margins. As debt collection has become harder over the years due to numerous factors, it has become harder to find seasoned, well trained collectors who can quickly become a productive member of the team. This is a problem I see on a weekly basis as a consultant working with collection agencies, debt buyers and collection law firms. Furthermore, I see very few companies developing their own in-house training and development programs to train, evaluate and promote highly skilled collectors within their organizations. Failure to do so leads to a constant lack of effective, seasoned collectors and the ongoing tail chasing exercise of recruiting, hiring and training people to fill roles vacated a once highly effective collector that has moved onto greener pastures.
There are currently a few vendors that are providing a service to get the RPC on the phone and transfer the call to a seasoned collector if you are interested in talking with a rep that can help guide you to the right vendor for your needs call Phillip W. Duff at 904-687-1687 X 101 for more info. phil@lighthouseConsultinginc.com