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Providing Creative Solutions to Common Problems
Providing Creative Solutions to Common Problems
Consumer accounts receivable management and consumer credit services cover just about everything that engages in any extension of credit or a point-of-sale transaction. By legal definition, consumer debt is incurred primarily for personal, family or household purposes and related to a consumer financial product or service.
Consumer collections are vital in the financial services industry as they help maintain the lending ecosystem’s overall stability. If you need assistance with consumer collections, we invite you to contact the Southwest Recovery Services team today.
While the exact consumer debt collection process will vary based on the consumer and your needs as a creditor, our consumer debt recovery process involves the following:
Every company that extends credit at some point will experience slow-pay and non-pay accounts. Some challenges to collecting range from the consumer getting over-extended and not having enough money to pay all their obligations to being unable to locate the customer.
In recent years, it has become increasingly easy for consumers to borrow and finance things they may not have been able to do in the past. Because of this, many people have accumulated a lot of personal debt and cannot pay. The laws and rules that apply to consumer credit have also made things more favorable for the consumer and less favorable for the creditor.
In-house collection processes are necessary for most companies as they can recover most of the money they owe, but there is likely a 2%-6% net charge-off left. These small percentages can represent millions of dollars if a business is large and doing hundreds of millions to several billion in sales revenue.
Southwest Recovery is a nationally recognized Third-Party receivables management company with experience and success in nearly all consumer credit markets since 2004. We can assist with locating and contacting consumers quickly, finding bankruptcy and deceased account holders, and utilizing predictive score models that indicate the likelihood of a consumer paying their account.
We also provide a secure Client Portal for our clients that they can use to submit account information, documents, report payments and view real-time account activity on assigned accounts. We can report unpaid accounts to Experian, Equifax and Transunion.
We are governed by the Fair Debt Collection Practices Act (FDCPA), (Consumer Financial Protection Bureau) CFPB, and the Fair Credit Reporting Act (FCRA), and are 20-year members of the American Collectors Association (ACA).
While commercial and consumer collections both involve debt collection, there are some significant differences between the two:
Commercial collections focus on recovering debt from businesses or other corporate entities such as partnerships. The debt involved in commercial collections largely stems from unpaid invoices or loans. Consumer collections, however, consist of recovering debt from individual customers. With consumer debt collection, the cause of debt stems from personal loans, credit card payments and other consumer debts.
Commercial collections involve higher debt amounts, resulting in more complex negotiations. At Southwest Recovery Services, our methodologies include speaking directly with business owners, and if needed, we can escalate it to legal action.
The consumer collection process involves smaller debt amounts but more accounts. At Southwest Recovery Services, our primary focus is maintaining compliance with consumer protection laws like the FDCPA, and we often use common strategies like customized payment plans. While a creditor can escalate the debt collection process to take legal action, it is less common.
Since commercial collections involve speaking with multiple stakeholders, they require a more intricate negotiation process. For example, the Southwest Recovery Services team will interact with various departments and may have to navigate complex organizational structures to reach a resolution.
In commercial collections, we would only deal with the individual borrower, which makes it easier to find a solution, like a payment plan or settlement.
Consumer debt collection management is the process of overseeing and coordinating the activities involved with recovering consumer debts. Utilizing consumer debt collection management plays a vital role in maximizing debt recovery while helping maintain positive consumer relationships. Some of the many elements that make up our consumer debt collection process include:
At Southwest Recovery Services, we follow many best practices when it comes to consumer debt collection management, such as:
It’s common to receive complaints regarding the consumer debt collection process, making it important to have a structured process in place for a streamlined resolution. If a complaint were to occur, we have the following system in place to address and resolve it:
Since the creation of Southwest Recovery Services over 20 years ago, our mission has been to offer world-class collection services for companies from every sector. When you choose us as your consumer debt collection agency, you will have an experienced team on your side, and we will use our intensive industry knowledge to find accurate solutions for all of your collection needs. Contact us today to learn more about our services and how they can benefit your collections process. You can also email [email protected].