Bank Debt Collection: Demonstrated Scientific Tactics That Will Boost Results

According to the American Collectors Association, which has conducted a number of studies in banking, write-offs, and human behavioral aspects, bank debt collection should be viewed as a science. Reviewing the statistical results can aid in determining the best means of recovery of debt.

According to the studies, 50% of those targeted by bank debt collection have the ability to pay and simply choose not to. Being diligent and persistent in efforts to recover those accounts can pay off in the end, when clients finally decide to pay.

And the sooner the pursuit is begun, the better. Most customers who have one delinquent account have many, and bank debt collection agents will be lining up to recover the lost funds. Starting early puts your unpaid account at the front of the line. Also, delinquent accounts between 60 and 150 days old are harder to collect, with success rates by debt collection agencies dropping 49%. Reaching the client sooner is always better.

Finding alternative methods of bank debt collection pursuit is an ideal strategy. Calls are often ignored and, according to studies, 80% of all successfully collected accounts by debt collection firms are recovered through letters mailed.

If you look at human behavior in general, it’s no wonder. After all, while collection calls for delinquent payments are ignored, bills received in the mail for current accounts – phone, electric, etc – are paid. In behavioral science, this is labeled as perceived consequences for nonpayment, which are absent in the phone call but obvious in the letter or bill received.

Often, letters also avoid being too aggressive. According to bank debt collection processes where demands are high and there is a lack of willingness on the part of the collector to negotiate manageable payments, collection efforts are 15-30% less successful.

Of course, as stated, consequences are a motivator. Third party debt collection firms will report the debtor to the credit bureaus for failure to pay, which is why they are more successful in their recovery efforts than many internal bank debt collection resources.

Understanding the science of bank debt collection helps to increase success in recovery of delinquent funds. The more you know about the way potential debtors think, the better your ability to keep funds coming in.

Next, explore more important facts and resources about bank debt collection services, as well as collection agency solutions.

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