New doors opening for doorstep collectors
Published Monday 02 October 2006
By Deborah Cassar, General Manager, Doorstep Collections, The Lewis Group
Recently, the concept of doorstep collections has undergone somewhat of a resurgence. Whilst businesses tussle with finding ever-more effective ways of recovering bad debt, many have turned once again to the tactic of doorstep collections as an integral part of a wider collections strategy.
But whilst the 'traditional' market for doorstep collections would be the credit card companies, mail order/catalogue firms, utility providers, telcos etc where doorstep will have yielded effective results historically, there has also been a notable shift in the client base to other, perhaps more surprising establishments. These include universities, Local Authorities and government agencies who, but a few years ago, would not have envisaged considering such services concerned, no doubt, with the possible media backlash.
Indeed, certain parts of the media have a lot to answer for, with many people's view of doorstep collection (and collectors) based entirely on what they see on their TV screens. But such a view is a world away from reality. For businesses trying to recover debt, it is not just their money that is at stake, but also their reputation. Doorstep collection, therefore, has to be a subtle process about which businesses and individuals should have no concerns.
It is important to point out from the start that doorstep collection is never the first step. To refer to it as the last resort, however, implies desperation; the reality is that doorstep collection, like litigation or any 'specialist' tactic deployed, is merely a further stage in the debt recovery process.
Most businesses are familiar with the initial stages of recovering debt – the front-end work by telephone and by letter, followed, if necessary, by litigation. Some customers, however, may be afraid or shy away from the inevitable next step – doorstep collection. Only ever carried out at a client's request, the moment when doorstep collection comes into play is when all other methods have been exhausted.
In many cases, the reasons why a debtor has failed to respond to other methods and repay his/her debt is that he or she simply does not know how to do it. Litigation may seem threatening and bureaucracy may be overwhelming. A 'head in the sand' reaction is not uncommon. Letters can be put away in drawers, legal summons ignored both through inertia and an inability to see a possible resolution.
That is where a doorstep approach is appropriate. Doorstep collection has a positive starting point – helping debtors to manage repayments and, through a constructive process, achieving a resolution to the problem, for both parties. Doorstep collection, literally, puts a human and approachable face on what is otherwise a potentially remote and daunting process.
Collectors visit the debtors with a view to talking them through their problems and devising a strategy to help them repay their debts and many debtors welcome this as an alternative to a bombardment of paperwork. A dialogue is then opened and collectors can make suggestions and offer advice to help resolve the situation.
The process is a co-operative one. Doorstep collectors work on the basis that the debtor is willing to pay but does not know how to do so. It is rarely, if ever, a 'wont pay' scenario. The skill of the collector is in using their negotiating powers and persuasive techniques to overcome even the most stubborn objections and refusals. Only at the debtor's request, when there is clearly no room for negotiation, or the collector feels in any way threatened, will they walk away.
Solutions for the debtor can be as straightforward as the doorstep collector arranging for the repayment instalments to be collected in person, or spreading payments and re-negotiating on the debtor's behalf with the creditor. A full repayment plan will be negotiated to take the pressure off the debtor.
When deciding to take the next step to outsourced doorstep collection, businesses are often concerned that measures taken will reflect negatively on their operation. Indeed, this is still the principal barrier that doorstep collection agencies have to overcome.
But times have changed, and continue to evolve. Not only is doorstep collection an acceptable career path for highly professional individuals, but some agencies have adopted a pyramid structure of doorstep collectors, supervisors, area collections managers, senior collections managers and even a general manager. This means that there is a well-managed, transparent system of accountability and progression and, above all, control.
All doorstep collectors are self-employed, but companies ensure that they are carefully vetted and carry ID cards at all times. Performance is reviewed on a continuous basis and initial training is followed by regular and ongoing sessions to develop skills. Other professional operations are beginning to adopt this model of working.
What will undoubtedly surprise many that have not yet employed the services of a doorstep collector is that a large proportion of the workforce are women. At The Lewis Group, for example, which has teams throughout the UK, including Scotland, about 35% of the team are female. In certain cases, a woman's naturally inherent 'people skills' in terms of empathy, negotiation and gaining trust can work extremely well.
It is important also to counter misconceptions over cost and results. Each customer has a tailored service agreement depending on their needs and doorstep collection will often be a part of this. Commission charges will be higher, simply because the cost of collection is higher; however consideration must be given to the fact that employing a doorstep collector is the difference between seeing some of the money again or not seeing anything at all, the argument is clear. Without the involvement of doorstep collectors, businesses need to be prepared to write off certain debts – why not at least try to recover some of the money?
In certain areas, this message is clearly getting through. Volumes of doorstep business have increased, partly down to the success of organisations selling their debt on to specialist debt purchasers that in turn employ doorstep teams who make arrangements with debtors to recover what money they can. The current 'fashion' reported by the Credit Services Association for businesses to opt for litigation early will also, no doubt, impact positively on doorstep 'traffic'.
What has been most surprising in recent months are the 'new' converts to the concept of doorstep collections, especially universities and government agencies. Local Authorities too are beginning to make the move.
There is no one single reason for the shift, more likely it is a combination of factors. Perhaps they have bought into the message that doorstep is an effective means of collecting debt that will not damage their (often very public) reputations. Perhaps – and this is certainly true of Universities – the legacy of student loans and mounting student debt has finally caught up with them. In an atmosphere of intense competition amongst universities for fees, collections performance has taken on a new reality.
And perhaps, when it comes to government agencies and Local Authorities, the squeeze on budgets has become such that political niceties have given way to the need for real cash in the bank to deliver the services they have promised, and with certain types of debtor, doorstep collection represents the most effective way of ensuring such cash is recovered, whilst similarly ensuring that the reputation of the Local Authority is upheld. Perhaps the realisation, that what you see on the TV or read in the newspapers does not always ring true in real life, has finally sunk in.
In an environment where the traditional role of debt collectors is changing and new consumer-friendly measures are being implemented across the board, people have easier access than ever to advice and repayment methods. It clearly makes sense to offer the debtor as many opportunities to pay as is possible and some agencies have expanded into help-lines and websites to provide other access channels for those owing money and to facilitate the repayment process.
But amongst all this change, one thing is certain: clients may change, but debtors – and the way certain debtors respond – remain primarily the same. The emphasis in all forms of collection is on helping the debtor and solving the issue. Doorstep collection will never be the first point of recourse, but in many instances it can be the only process with a positive resolution.