Relying on in-house collections can sometimes be one dimensional in terms of approach and response, letter, call, letter, call…you get the picture! Factor in customer experience, managing churn, complaint management and sales department pressures you will likely be frequently asking your credit controllers to ‘don’t let me down’ or you’ll be saying ‘hello goodbye’ to your profits and not even working ‘8 days a week’ will save you!
Having come from a non-legal collection environment I was uninitiated to the minutiae of what a law firm can actually do when it comes to collections. ‘With a little help from my friends’ I have seen that legal collections hold more sway with won’t pays and that we are experienced enough and care enough to identify the can’t pays and say ‘I want to hold your hand’ and help you through this. Even though some customers try very hard to take us on a ‘magical mystery tour’.
For some creditors passing their debts out to an established, compliant and successful debt collection agency makes good sense, after all if they don’t collect you don’t pay, so what happens when the DCA reaches the end of the cycle? Can they take Legal Action? I don’t want to be chasing a debt ‘when I’m 64’ and I bet you don’t either! Some creditors are happy to take what they can get and to just ‘let it be’ with the uncollected amount, after all you don’t provision a bad debt write off budget for nothing. But law firms? Well, ‘we can work it out’ and squeeze just that bit more for you if you believe as we do that a clearly identified won’t pay can be issued a judgment fairly.
A law firm can do the same job as a DCA and beyond, or work cohesively with them to complete their end of the cycle process when they don’t litigate themselves, or simply complement an in-house collections team at the end of their own cycle with no where else to go. Maintaining momentum and bringing gravitas the situation to provoke a healthy contact rate. After all, we all want paying ‘yesterday’
So listen, ‘do you want to know a secret?’ the FCA guidelines are provoking a change in how collection activity is remunerated, actively discouraging targets and incentives that promote poor customer outcomes, so in the not too distant future everyone will have to ‘come together’ to agree a new way to charge and pay for collections that isn’t tied into actual cash collected but into actual measurable service provided. This is going to happen! whether a flat fee is used per call, per letter, per plan, or a charge relating to defined quality checks, perhaps by the client or even charges for time spent by way of billable hours for talk time admin etc, it’s going to change….it’s just no-one quite knows how yet, the FCA haven’t specified so we will just have to ‘twist and shout’ until that eureka moment arrives and ‘we can work it out’. There will be no ‘revolution’ as far as I can see just a mass transition to the new way.
But ‘here comes the sun’ if you partner with a law firm to complete your collections, you are practically ensuring a better customer outcome because by taking definitive steps to seek payment yourself or through a DCA that clearly point to an eventual legal solution means the customer is not sent down ‘the long and winding road’ of multiple agencies all sending the same letters!
What are you waiting for? Give us a call and do ‘something’ to improve your bottom line!
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