The increase in the diversity of credit bureau information has resulted in greater opportunity to improve collections performance with the use of proactive pre-arrears screening.
Why wait until an account becomes a problem when your company could have the data and expertise available to resolve a particular customer situation, before it leads to a break in payments? Many businesses simply don’t have the resource to do this but by using our experienced team of pre-arrears negotiators, Red2Black Collections could help your business overcome tomorrow’s bad debt problems today.
Whether this takes the form of pre or post payout verifications - mitigating fraud or money laundering risks - or positive account resolution for over-indebted customers, our services can be specifically tailored and white labelled to suit your exact requirements and processes.
Not only could this significantly reduce bad debt but by helping the customer before their situation escalates to a missed payment, you are able to forge a better relationship with them. Improving your customer relationship management (CRM) offering can also enhance your brand reputation by ensuring that you are visibly treating the customer fairly.
Treating the customer fairly is often a major factor in engaging with customers and reaching an amicable repayment plan. By taking prior action before debts become a problem, the customer is more likely to be forthright and open about their situation and a resolution.
Pre-arrears arrangements can help to prevent unnecessary stress for both you and the debtor by pre-empting situations that could lead to an inability to repay debts such as:
- Reduced income or job loss
- Increased outgoings or rising bills
- Repayments being reduced or missed.
The main benefit of having pre-arrears screening in place is that by understanding the customer’s circumstances and working with them to recover outstanding payments, the customer forms a positive opinion of the lender. Customer confidence will often mean that the customer chooses the same lender or service provider in the future. Positive endorsement from existing customers is also a strong way to increase business through new acquisition.
Many creditors may find that their current collections model is not suitable for ensuring that they maintain a manageable cash flow situation and provide the best level of customer service possible. This is where outsourced pre-arrears services could ensure that you don’t end up in a negative trading situation.