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The COVID-19 Pandemic has had a profound effect on us all in so many ways. For many credit unions the pandemic has translated into staffing shortages and increased collections efforts. Increasing the allowance for loan loss doesn’t help the equation. However, outsourcing collections is a great strategy to combat increasing delinquencies without hiring and training new staff or asking employees to step up in these distressing times.
Trained professionals who specialize in collecting and recovering potential losses have a better chance of recovering loans fast. Managing the everchanging regulations in collections is a full-time job, and the collections professionals at United Solutions Company complete extensive training annually. By outsourcing collections, there’s no need to worry about turnover or training costs, allowing your employees to focus on member service, creating new revenue opportunities, and other more important matters.
There is greater focus now than ever before on compliance. This is typically the highest risk area for a lawsuit due to stringent rules. A typo on a collections letter or not defusing a situation properly over the telephone can lead to legal fee for the credit union. By outsourcing you will alleviate some of the risks associated with inexperienced collectors and liability for non-compliance.
Your costs will also be reduced as your delinquency rates decline. Collection’s professionals are specialists, trained specifically to get delinquent accounts up-to-date with patience and courtesy towards your members. With everyone under so much stress these days, having trained professionals calling on your members with patience and empathy is critical. Find an agency that uses a consultative approach to help your members that are having difficulty making payments.
As your loan portfolio and membership grow, so will the collection efforts needed to keep loss in check. It is healthy for a credit union to assume some risk, and typically the higher the risk the higher the reward. However, this also means a higher probability of increased reportable delinquency and slower paying loans. Third-party vendors don’t have a blanket approach to collections, and there doesn’t have to be dialing for dollars. Offering a personalized and tailored approach, both to your institution and to your membership is something to look for in a third-party vendor. Adjusting to each member’s specific situation is important. Finding common ground to build upon with your membership is an important and rewarding process.
United Solutions Company’s unique holistic approach not only looks to resolve delinquency, but also seeks to make your member a better credit union participant. Our goal is to educate and strengthen the bond between your member and your credit union. Our calls do not have time limits but are goal driven: to resolve delinquency.
