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CCR2 Collections Technology

Texting and social media as collection tools

Modern technology can provide new forms of communication that customers feel at ease with

Peter Mair Field litigation manager

As we are all aware, cash collection is particularly challenging in the post- Christmas ‘hangover’ period. From a business perspective, ripples will be felt well into February and beyond. This is particularly true of the housing

sector, with residents’ budgets ever stretched and central government funding reducing year on year for staffing, systems, and resources in general. Whatever market sector you operate

within, experience will usually evidence an increase in legal activity during the first quarter of the new year.

Reducing cost Although often unavoidable, this is ultimately costly and to neither party’s benefit. Additionally, from the creditor’s perspective, the period of maximum leverage exists prior to action being taken. Thereafter, when the damage has been done to the debtor’s credit history, they may have little incentive to subsequently try to clear the debt; added to which there are likely to now be legal costs and interest. How best then can collections performance

be improved and maintained without resorting to further costly action? As litigation manager at a housing

provider in London, my team are tasked with collecting payments for day-to-day and major works service charges within one of the most economically challenged boroughs, so we are well aware of the issues involved.

Reaching out Once the standard arrears procedure has taken place, we have recognised the need to


reach out to customers by other means in a final attempt to agree repayment plans and avoid further recovery action. Cold calling is, of course, one option,

but, in my experience, it often generates confrontation rather than solutions. This is possibly because customers are unlikely to be contacted at a time that is convenient to them. E-mail is effective, but since I introduced text messaging as a first-line means of communication, customer satisfaction and performance have improved dramatically. Aside from the cost and time benefits, a

recent report has found that smartphone ownership now extends to an estimated 76% of the UK population. As you would expect, younger residents in particular appear receptive. This can be explained by the

communication being non confrontational and brief for data protection purposes. The customer can of course respond at a time of

their choosing, whereas conventional postal reminders may often be opened after a long commute or hard day at work and therefore initiate a stressful reaction. Quantifying the benefit is less

straightforward and is something I am currently assessing how best to manage, but without question has been very successful to date.

Royal seal of approval Moving forward, with central government – and even the royal family – embracing Twitter and Facebook, many housing providers are doing likewise to further improve interaction with their residents. I have plans to implement further technology- based tools throughout the coming year. Undoubtedly, texting and the use of

social media will become increasingly important collection tools as the pace of change continues and I would love to hear your thoughts on the matter! CCR2

February 2016

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