The holidays have ended and now it’s time to pay off those bills. For most people it’s all part of the season of giving. However, for some debt-ridden consumers, this time of year serves as a glaring reminder of their obligations. Many use the New Year as a starting point to try to make amends, and make a resolution to pay off their debts or make arrangements to reduce them..
A Nation United in Debt
However, for many well-intentioned consumers who try to embrace the New Year with a newfound sense of fiscal responsibility, they find it hard to do so. In fact most average Americans live with debt, though not all of it in arrears. According to a recent survey by Experian, the average debt balance per adult in the U.S. was $92,727. Broken down further, those who owe debt on average owe $38,792 for student loans, $19,703 for auto loans, $208,185 for mortgages and over $5,000 in credit card debt. Those are sobering numbers, especially when thinking about those newfound bills from their holiday purchases.
What drives consumers to incur debt is simple to understand. However, what brands need to understand is not what causes people to incur debt nor how much they owe, but truly that the simple act of collecting debt can be fraught with risks. Not only do those in Account Receivables Management (ARM) have to adhere to an ever-expanding series of regulatory guidance, but they have to be aware of how consumers perceive the effort to collect debt to begin with.
Remember Who You’re Working For, and With
Every time your agency interacts with a consumer regarding an ARM issue, it is vital to remember the exchange is not simply that of a collection agent and a consumer. The relationship transcends that exchange and is actually a reflection on the originator of the debt. Agents are the face of your company, and in the case of collections, they’re also often the face of the brand where the debt incurred.
A car loan or a retail credit card that is in collection is not separate in the consumer’s mind from the dealership where they purchased the SUV or the outfit they bought for a holiday gift. Collection agencies know just how tenuous the customer relationship experience is. Agencies understand if an agent becomes overbearing or goes rogue, consequences can be bad for the agency and the originator. Such consequences can lead to lawsuits which impact the brand perception of the originator of the debt in the eyes of the consumer. Consumers will find it hard to separate the call from your agency from the car dealership or retail credit card entity and thus have buyer’s remorse and can often result in bad word of mouth.
A Way to Use Technology to Ensure a Higher Standard of Care in Collections
Conversational AI is the set of technologies behind automated messaging and speech-enabled applications that offer human-like interactions between computers and humans. Conversational AI offers a way for collection agencies to ensure total compliance with all state and federal regulations regarding debt collection. It also offers a way to ensure a consistent, customer-first interaction with every inbound and outbound call, text, or chat.
In fact, Conversational AI solutions like a virtual collection agent can understand and communicate at a human level, so people can talk or type naturally just like they would with a human, providing a human-like, yet judgement free way, to process debt. The technology allows consumers to communicate on their terms, in their words, without the fear and apprehension associated with talking with a live agent.
A recent Harris Poll Survey found that 23% of consumers said that they prefer interacting with a virtual agent (instead of a human agent) when dealing with uncomfortable or embarrassing financial information. And in a recent survey conducted by Interactions, 64% of consumers said that they felt uncomfortable when contacted by a live agent regarding an overdue debt. Meanwhile, another survey found that 44% of consumers preferred making a payment on an overdue debt through a virtual agent.
Surpass Expectations, Support Consumers, and Lead with Innovation
The time for your collection agency to discover the power of Conversational AI and virtual collection agents is here. Not only can it ensure compliance with all governing regulations and rules but it is always courteous, competent, and consumer-friendly. Using it can take away the Fear, Uncertainty and Doubt (FUD) most consumers feel when discussing unpaid debts, while assuring your best agents are routed calls and requests that need the personal touch.
