Best Practices from a Seasoned Debt Collector
Bill Plunk has been in business as CimCo (which is short for “the check is in the mail company”) for over 20 years as a commercial collector. Prior to CimCo, Plunk worked for three years with a bank and two years with a Credit Union. He has collections experience as a consumer and commercial collector with in-house repossession, as a lender, as an Assistant Vice-President, and as a branch manager. His widespread experience within the collections industry and his long-term success record is why we sat down with Plunk to learn about his best practices as a collector.
Plunk’s approach to the debtor is unique. When he first started in the collections industry, he realized that if his life had different circumstances, he could have been the guy on the other side of a collections call. This caused him to think about how he’d want to be spoken to and to frame an approach that has worked well over multiple decades to effectively help his clients be paid by debtors.
When he first gets in contact with debtor, Plunk starts the conversation with, “I know what my client’s side of the story is, but what is your side of the story?” He knows there is a reason why this person hasn’t paid and it’s important to determine through their story what kind of debtor is being addressed.
Types of Debtors
According to Plunk there are three kinds of debtors and it’s important to know which kind you are calling:
- The debtor that can’t pay – Plunk says, “If the debtor doesn’t have any money, then collecting the full debt amount on that call is not going to happen no matter how good of collector you are.” This debtor will require a process and a plan rather than be a simple call. If a debtor reaches a point where they are obstinate or unwilling to make any concessions, it may require reminding them that your recommendation will be to your client that litigation is the only logical step left. “Often,” Plunk says, “this brings them back to the table of reason.” Plunk is careful not to manipulate using this as a tactic early in the conversation, but only after the debtor can see his considerable efforts to come to a different solution.
- The debtor that isn’t willing to pay – If the debtor has the money but is trying to decide who to pay first, then it becomes the collector’s job to make sure that his/her client moves to the top of the debtor’s ‘to be paid first’ list. A good collector knows what to listen for in the conversation and calls the person to step up to their responsibility to their client. The quality of the relationship that the collector can build with the debtor is often what drives the debtor to move his/her client to the top of the list.
- The debtor who has a dispute to be settled – If there is a dispute or something that needs to be resolved (perhaps the sale wasn’t invoiced correctly, or the PO number was off, or there is a different misunderstanding), then the collector will want to act as a mediator who assists in getting the misunderstanding fixed. Many times in debt collection there is either poor communication, lack of communication or both. The collection agent is uniquely able to say to the debtor what the client wishes to say but pragmatically can’t say. Plunk will say, “Here is how I believe my client interprets your actions to not pay…” and be able to take some of the sting out of the conversation while still making a strong statement. Plunk also realizes that though he represents a client, he remains open to the idea that the client might have made a mistake.
The management of time is also an important consideration for the collector. Plunk says, “As a collector my goal for my client is to get paid for the debt in full, but as situations drag on there is sometimes an offer that can be found that is less than the debt paid in full.” Plunk explains that all clients want to avoid litigation because avoiding court costs is beneficial to them. He adds, “In some cases if given the choice of taking less money now vs. getting more money over time, many clients will choose the quickest path to the resolution of the matter.” The longer a debt issue remains unresolved the more likely a new situation could come up with the debtor that complicates their ability to pay off the debt.
Best Practices of a Debt Collector
Some debtors have taken an adversarial stance regarding their debt. The role of the collector is to tear down walls that are in place and take back the ground that exists between the debtor and the client. It takes a special kind of collector to cultivate a willingness on the part of the debtor to fully and finally resolve the issue. To be able to do this Plunk says there are 5 top best practices that he utilizes to be a top collector. The first three practices act as a three-legged stool depending intimately on the presence of each other. The last two practices Plunk calls “out-riggers” that may surprise you coming from a seasoned debt collector.
- Be Persistent – Collectors must master the art of being consistent by calendaring next steps and faithfully following through with it. While persistence doesn’t mean calling 6 times a day, it does means calling to establish contact and then following up at a reasonable time, hopefully within the debtor’s comfort zone. Persistence is being consistent and setting expectations that if something is to be done by a certain time then the agent will follow through to make sure it gets done. Persistence means getting a payment on today’s call and setting up another payment in an agreed upon number of days. If a debtor misses a payment, the collector should persistently contact the debtor the next day so that the he knows to stay on the agreed-upon plan.
- Be Professional – In communicating with the debtor the structure of the collector’s sentences needs to be precise. Collectors should be well-spoken and have quality conversations that leave the debtor with clear goals going forward. Collectors want the debtor to know what steps are next and to have clear expectations of how the collector will proceed and how they should respond.
- Be Personable – The collector should approach their debtors as the kind of person that he/she would like to collect money from him/her. Plunk says that there is a tension between the collector and the debtor. “Sometimes we as collectors need to ‘drop the rope’ to ease the tension. For example,” he adds, “if the debtor doesn’t have the money, you might say, ‘I have no reason not to trust that you don’t have the money right now. But when can you be certain that you will have the money and by what date?’” Plunk asks the debtor to quantify how certain their plans are because if it is 50%, 80%, or 100% certainty, it can make a big difference in the plan. “You have to ask debtors to not promise what they ‘think’ they can do or ‘hope’ they can do, but to promise what they ‘know’ they can do. You have to remind them that you are in communication with your client and informing them that what can be expected going forward,” summarizes Plunk.
Plunk points out that the first three best practices must all work in balance to be successful.
- If a collector is professional and personable but not persistent, he/she will have well-articulated conversations but will lack the persistence to collect any debt.
- If a collector is persistent and personable but not professional, he/she might be overly friendly but miss important deadlines and leave debtors forgetting the all-important next steps to resolve the issue.
- If a collector is persistent and professional but not personable, he/she will have debtors that may admire his/her professionalism, but the debtors are not going to answer calls or want to talk to him/her.
- Dispense Dignity – Collectors should strive to treat people as a dignified person even if they prove to be otherwise. Plunk says, “People have called me names and I’ve told them I’m going to hang up and call them back once they’ve had a chance to cool down.” He then adds, “If you notice I haven’t called you names and I’m not going to, but I’m also going to expect that in return.” He’s had people stop dead in their tracks and say “I’m sorry. I’m under a lot of pressure and I didn’t mean to say that.” As a Christian, one thing that Plunk does to remind him to dispense dignity is prayer. He says, “I don’t just pray for my client that every account gets collected, but I’m praying for the debtors that justice will be served if they are right as well.”
- Cultivate thankfulness – Debt collection is not work that everyone can do. It is also work that not everyone wants to do. Plunk fell in love with the work because he “gets the chance to be a peacemaker between his client and a debtor that owes them money.” Plunk spends time praising God for “getting paid to use my mouth to talk, and being thankful for my work and all the circumstances. I also praise God for getting paid when a client says here is a tough one that no one can collect.”
The unique approach outlined by Plunk has earned him a steady stream of clients who bring him the celebrated “difficult” cases. Plunk has even had the unique circumstance of having a former debtor choose to hire him to collect for/not from him. Plunk concludes “When you treat people right, fairly, and use these five best practices, you almost can’t help but get the best results.”