Tips and Strategies on Dealing with Collections

Yes, I used to be a collector. It was a job that I just ended up in at a very young age. My peers and I used to joke about how no one ever grows up saying, "When I grow up I want to call people about delinquent bills". Nonetheless, I spent 6 years on the phones and 14 years managing various collections, marketing, credit policy and other groups inside credit card companies and banks. I wanted to share some specific strategies that you can use when dealing with collectors.

1. Do not talk to the collector when they call you- All financial institutions either outsource these processes and/or run all outbound calls on autodialers. If you do pick up, you will hear a pause and then be connected to someone most likely in the Phillipines, India or some other low cost provider outside of the actual institution that issued your card. The other critical piece of not talking to them when they call is that you will not be prepared to have the discussion that you need to have. If you receive a call at work, immediately answer the phone id yourself and advise them that you can not take calls at this number. The majority of banks will take this verbal request and update your file. If your account happens to be at an agency, send them a letter to request no calls to work.

2. Call them back when it is convenient to talk on your terms. Plan out your call, do not go into this call blind. Banks have specific scripts and negotiation tools that they use to get you to commit to payment. If you commit to pay and don't , rest assured that they will throw it in your face at some point. If you are having financial difficulties, explain what is going on and ask for their help. Banks have payment arrangements that they can set you up on, even reduced or deferred interest plans. Do not think for a second that they will just offer this to you. There are negotiation matrices that the collectors are taught to follow.

3. If you are not able to communicate effectively to the person you are speaking with or they are being rude, ask to speak with a supervisor. If they refuse to transfer to a supervisor, hang up immediately and call back. The likelihood that you will get the same person is astronomical, especially at the big banks.

4. If you make a payment arrangement, keep it! Especially if the bank has given you a reduced interest rate or payment. Typically, there are rules/policies and even in some cases bank regulations around how many times certain payment arrangements can be offered. Ask questions about the arrangement, ask for a letter confirming your agreement. Top tier banks all can provide these with great ease.

Other tips

A great way to opt out of talking to any Bank collector is to refuse to agree to the call being recorded. Banks record a certain percentage and in some cases all calls for "quality". This is the banks method to ensure that there are no crazy collectors out there breaking the Fair Debt Collections Practices Act (FDCPA).

Never get upset or yell at a collector. No matter how frustrated you are at your financial situation, getting upset at the collector that is making $10 an hour trying to get you to pay is never a winning strategy.

Send a letter to the bank certified return receipt requested asking for their assistance. Be honest about your financial situation. Banks are extremely flexible contrary to what most people will tell you. I can tell you that from my experience, when a customer opened up and gave detailed reasons, shared their income/outgo statement with the banks, I would be more inclined to assist with a special payment arrangement or provide other avenues for help.

Every conversation that you have with a collector or customer service agent is noted in your file. I can not tell you how many times in my career that I would review notes of customers and see where the reason for delinquency was "My spouse died" and two weeks later guess who I was talking to? Yes, the dead spouse.

Last but not least, be aware of where you are financially. Take a sheet of paper or do it in a spreadsheet and write down all of your debts. The total balances, monthly payments and interest rates. Take stock of where you are at, how much you need to get out of the mess you got into and act on it. Pretending the situation is going to get better by itself will not work, that I can guarantee you.