Is Your Debt Collections Shop Ready for a Recession?

Debt collections managers – whether working for a fintech or alternative lender, a collection agency, or in healthcare or utilities collections and recoveries — can anticipate a surge in inventory in the event of a recession.

Based on the response we received from Mike D’Andrade’s late September post on getting ready for the next recession, we created a checklist of action items that every collection shop should be considering now.

This checklist includes advice on assessing your technology gaps, vetting collection-agency partners, securing consent, and protecting your team.

Our prospects and current clients tell us they’d like to expand their debt collection efforts from just letters and calls to a more digital, omni-channel approach. This will be particularly important if inventory spikes in the event of hard times.

Additionally, and for a bit of historical perspective, debt collectors have been the second-leading generator of consumer complaints since the Consumer Finance Protection Bureau (CFPB) added the debt-collection category in June 2013.

Warning Signs

That in and of itself is unsettling, but now we have the additional dark cloud of a potential recession. Even though the U.S. economy is in the midst of the second-longest economic expansion in history (going back 161 years), the warning signs are there:

We hope this checklist sparks some discussion within your businesses and helps you prepare today to avoid negative debt collection experiences later. You can download the checklist here.

Peter Osborne is Katabat’s Content and Branding Director.  He previously worked in marketing, group administration, and communications at Bank of America and MBNA America and has also worked for American City Business Journals and Gannett.

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