While launching and managing a collections program for any type of loan can be a challenge, some credit unions, regardless of size, may view outsourcing as a viable and efficient solution.
Understanding how to meet a cooperative program’s needs is part of Donna Floyd's role as the collections relationship manager for PSCU Financial Services, the St. Petersburg, Fla.-based payments CUSO that offers servicing to credit unions on the First Data Corp. card platform.
Another part of Floyd's job is to manage PSCU’s program and its 22 collections specialists, who collect on a wide variety of different loan products for over 50 credit unions and more than 20,000 accounts each month.
Floyd said PSCU's collections programs employ a mix of technology and the “human touch.” This approach is included in the concept of relationship collections used by other credit unions but with an additional reach and capabilities targeted at challenged programs.
For example, the prime time for collections is between 6:00 p.m. and 9:00 p.m. when members tend to be home, Floyd said. However, a credit union with limited collections staff can find it difficult to make calls during that time frame.
Since PSCU has call centers that serve both the East and West coast, it helps ensure that credit unions reach the members at the time when they are most likely to take the call.
Floyd said human touch training starts in the new collector's first week. They are introduced to the CUSO's collections philosophy and trained, or more often, retrained, on how PSCU handles collections.
“We have a number of call centers in the area,” Floyd said, referring to the Tampa-St. Petersburg area where PSCU is headquartered. “So, we often have people come to us with collections experience; but [when] it’s experience in a different way of collecting, we have to retrain.”
One thing that PSCU collectors do differently than others is to ask up front about the reason for the delinquency, Floyd said.
“If you think about it, this can be a hard question to answer but if you ask it, you get a lot closer to the real reasons for the delinquency and you are in a much better position to help the member find a way to bring the account current.”
Floyd said PSCU collectors are empowered by credit unions to offer delinquent members repayment plans that were designed to begin with partial payments if that was all the members could handle. They would then move steadily closer to full payments over time, if possible. Sometimes, if the situation with the member is too economically difficult, PSCU has to go to the credit union to explain the situation and make a recommendation on how to proceed.
“Sometimes, we almost become an advocate on the part of a member,” Floyd said.
The First Data card platform allows several different repayment options such as setting a fixed, monthly payment on an open account, which allows the credit union to keep it open while the member brings it out of delinquency. Floyd said the collector and the credit union would still have to assess the risk of keeping the account open.
“Some accounts just need to be closed,” she acknowledged.
While relationship collections has some strengths, Floyd said PSCU has always tried to make sure that its collectors consistently called on different accounts so that they stay fresh in the job and the same degree of customer service could be offered across the board.
“We don't want someone being offered something that wouldn't be offered to someone else because a friendship [has developed],” she said.
Floyd said another way PSCU collections differs from other programs is that it ensures that its collectors have a career path vested in the CUSO. That connection tends to keep turnover low and it helps train additional collectors. PSCU also tries to make sure that its collectors have a variety of different call types, again, to keep things fresh, Floyd said. Since some may see the work as drudgery, the CUSO works to keep the atmosphere fun by offering small contests with non-monetary rewards such as being able to wear jeans more than once a week.
“One of the things that makes me particularly proud is that in the time I have been in this career, it has moved from being merely a job to being a profession” Floyd said. “It takes skill and training to be a good collector and being able to offer that to credit unions is a real privilege of my job. Collections used to be something that nobody wanted to talk about, but now it’s become something that more institutions understand they need.”