Debt Collections Trends: More Consumers Claim Debt Is Not Theirs

October 6th, 2014

In debt collections, the conversations between consumers and collectors must be two-way conversations. Both parties need to listen so that everybody is informed about the facts of the situation and what the process will be.

These conversations go south in certain instances for a number of reasons. A lack of information emerges when the conversation turns one-sided. The topic at hand gets derailed because of a misunderstanding. Productivity and efficiency get sapped if one party or the other fails to listen to what is being said. Most importantly, if a collector fails to listen or turns the conversation so that it is only goes one way, they could fail to treat a consumer with dignity or respect or fail to recognize that they are not even talking to the right person.

Debt collections data from this past August indicate that complaints are down overall. At issue here, however, is this tidbit: the number of complaints is on the rise from consumers who claim the debt in question is not theirs. From InsideArm.com

The total number of debt collection complaints published by the CFPB in August fell by more than eight percent compared to July. But the percentage of complaints specifically claiming that the “debt is not mine” jumped from the previous two months. Complaints about medical debt also increased in the month.

For months, the sub-issue of “Debt is not mine” has been trending upwards. In August, it took a big leap, accounting for 28 percent of all collection complaints, compared to 25.2 percent and 25.4 percent in June and July, respectively.

Now, there are a number of factors in this trend, some of which will remain fluid. For each case in which a consumer claims a debt is not theirs, there are unique factors in play. But one takeaway from this information should be this: collectors simply must be active listeners. As they are going through the initial stages of a call with a consumer, including the validation of information, they must listen carefully to verify that they have the correct person on the line. This will not only minimize complaints, but it will also lead to more productive and respectful conversations.

Collection agencies must ask themselves: do we have the training in place to minimize this type of complaints? Do our collectors understand when they should stop pursuing an account because it is not the right consumer?

Creditors must ask themselves the following questions about their collection agencies: what type of quality assurance do they have in place? Do they monitor recorded calls? What types of complaints do they receive and how do they log them?

In debt collections, the conversations are often difficult. Clear communication is of the utmost importance so that the right types of conversations are taking place with the right people.

Link: Collection Complaints Fall in August, But More Claim Debt is Not Theirs (InsideArm)