The challenge for anyone involved in collecting money from consumers is to find the right line. If you are too soft you risk being put to the bottom of the queue and never getting paid, on the other hand if you are overly forceful or aggressive you risk losing the customer and the money.
Utility companies have to be careful on two counts, they have a responsibility to provide essential services to consumers, and they also have a responsibility to ensure they don’t allow the consumer get into a spiral of unsustainable debt. In my experience I think service providers are too lenient with non-paying customers and allow debts to mount up for far too long before taking action. Now I am not saying you should cut off the service the day after the payment doesn’t arrive in every instance, there are instances when this is appropriate and there are instances where it is not. Hitting the right balance is essentially what I can talk about for days without repeating myself and is a major part of all the training I deliver
Credit unions too are having a difficult time, they have money available to lend and the difficulty is finding members with the capacity to make the repayments who are willing to borrow and the eternal problem of getting the members who owe the money to pay it back in full. I have developed a number of strategies to help credit unions and have discussed these methods at length at various training courses and in house training sessions I have delivered all over the country.
Bearing in mind the current reality the concept of “Paid in Full” is probably outdated and as a consumer credit controller or credit manager you have to train your staff to negotiate settlements with consumers over a time frame that is workable from their perspective. Here is the key – if you put a repayment schedule in place and you are continuing to supply on an ongoing basis you have to make sure the account is coming down month after month. For credit unions you have to make sure that the payment agreed covers the interest charged and something is going off the principal.
There are times when even that is not possible and I would recommend that you accept any payment in the short term just to maintain the contact and set a review date for three or four months down the line to see what things have changed.
We are still on a long hard road, credit is not as easily available as it once was and people have to reassess their priorities and question every cent they are spending to make sure they have enough for what they consider to be essential. This definition of essential may differ from person to person the notion of essential is easier to define: a roof over your head, some food to eat; light and heat in the home and the head space to enjoy life free from constant contact from creditors who are looking to be paid in full, when there is simply not enough to go around.
From the creditors perspective we have to ensure we are skilled negotiators who know exactly where the line I spoke about earlier is and the consistent and persistent approach to ensure a good result in the end, so the debtors can live and the creditors will get paid eventually.
We are all living in the shadow of the Celtic Tiger, whether we benefited from it at the time or not, and the immortal words of Charles J. Haughey “we have to go back to the old fashioned methods of living within our means”, has never been truer. When he said those words back in the seventies the level of personal debt was just a small fraction of where it is now, so it is now more important than ever before that we play our part in reducing the amount of unsustainable credit that has been granted for the benefit of our companies/ credit unions, for our customers/ members and for society at large.