Four Ways Banks Can Improve Their Debt Collection Process

 Posted on January 08, 2020 in Bank Collections

Common creditors such as banks will usually explore various means of collecting debts before they choose litigation. Filing a lawsuit for every debt collection dispute would be costly and hurt their relationship with potentially valuable clients. There are many cases that banks can resolve internally by working with the debtor. However, an inefficient debt collection process may ultimately be a waste of resources because of its low success rate. Adjusting your debt collection strategy may help you more effectively recover outstanding debts and understand when litigation is necessary:

1. Collect and Verify Client Information: It is difficult to start your debt collection process if you cannot find the client. When entering the debt agreement, you should ask the client for personal information, such as their address, phone number, place of work, driver’s license, social security number, and personal references. If you are unable to reach the client with this information, check with government agencies and other third parties to see if your information is out-of-date.
2. Be Proactive and Clear in Communication: Do not give your clients a reason to claim that they were unaware that they owed the debt. Send a message after the first time they miss a payment and follow up if they continue to not pay. Try to contact them in multiple ways until you get a response. Be specific about what they owe, when it is due, the consequences of not paying and how they can pay you.
3. Establish Phases of the Collection Process: Debt collection starts with soft inquiries about the unpaid debt but will become more aggressive the longer that the client does not pay. You need guidelines that will determine when you reach a new phase of the debt collection process, such as sending a final notice or using litigation. You can measure phases by the amount of money owed, the duration of the case, and the client’s response.
4. Use Different Approaches Depending on the Client: Automated debt collection messages may work fine with basic clients, but your most valuable clients need a more personalized touch. You need someone to contact them directly to figure out why they are late on the payment and to find ways that you can solve the issue while preserving your business relationship.

Contact a Chicago Debt Collection Attorney

Banks lend money to a variety of consumer and business clients, which can make collecting debts more complicated. You need an experienced Illinois debt collection lawyer at Dimand Walinski Law Offices, P.C., who can advise you on how to approach your most difficult and important cases. To schedule a consultation, call 312-704-0771.

Source:

https://bizibl.com/finance/download/6-actionable-steps-improve-retail-bank-collections-recovery