Click the link above to read the article as it appears in the October 2018 issue of Developments
By Wade Burns
At Scottsdale, Ariz.-based Equiant Financial Services, the No. 1 goal for our receivables managed clients is to ensure they receive every dollar they are due on the day that dollar is due. To that end, we have invested in industry-leading technology, implemented proven best practices and hired highly trained professional representatives. As a result, our clients have entrusted us with a portfolio that exceeds $1 billion and includes more than 155,000 individual consumer loans and 400,000 homeowners’ association receivables accounts.
Even with the best technology, systems, and personnel, however, there are challenges that can affect nearly every portfolio. Maintaining strong portfolio performance year over year requires tools and strategies designed with an understanding of challenges that are likely to occur. To help you take your company’s receivables performance to the next level, here we’re counting down five common reasons (in no particular order) that customers fall past due, along with tips on how to handle these situations.
No. 5 — Buyer Under Qualified
To provide your product to the most consumers while remaining profitable, you must evaluate potential buyers in terms of risk. Delinquency and receivables management would be a thing of the past if only the most over qualified borrowers were approved and everyone else had to pay cash up front. Unfortunately, that leaves out a huge portion of any business’ potential customer base. Each developer must decide their own standards for qualification and thresholds for portfolio delinquency. Using Equiant integrated reporting tools, developers can determine the ideal buyer profile for their product and the size of purchase they should be offering to that buyer. It’s better to have a smaller sale that performs well than a larger loan that ends up in default. These beginner buyers can then become ideal prospects for upgrades as their incomes rise and excellent life-long customers.
No. 4 — True Hardship
Sometimes bad things happen to good people. Job loss, illness, emergency expense or natural disaster are all perfectly legitimate reasons consumers fall behind on their payments. Our agents are trained to engage with these customers to seek long term permanent solutions to the hardships they are facing. We use tools supplied by the clients to create repayment plans and modify loans as necessary to retain every customer. That’s why Equiant prefers to call borrowers as soon as a payment is missed. Sometimes when a customer feels like staying current is hopeless, one simple conversation can turn the relationship around before they fall too far past due to recover.
No. 3 — Incorrect Contact Information
Timely contact with your customers through both physical and electronic channels is critical to a high performing portfolio. When borrowers are not getting their statements and notices, they are much less likely to remain current so maintaining detailed contact information on all parties including home phone numbers, mobile phone numbers, work phone numbers, and current physical and email addresses is essential for keeping customers current and resolving delinquencies when they occur. Equiant works to avoid gaps in contact information and costly skip tracing fees by updating contact information and consent on every interaction with the customer.
No. 2 — Dissatisfaction with Product
When borrowers are unhappy with their product, they will often stop making payments on both their mortgage and their annual assessments. This is where our agents, working in concert with our clients, can help by investigating the issues around the dissatisfaction and offering assistance to resolve. The key is to reach out to the borrower proactively to determine what’s going on, preferably as soon as the first payment is even a day late. Communicating closely with clients regarding these issues and facilitating a resolution usually earns a satisfied, high performing customer. Clients also use this feedback to make adjustments to their sales, reservations, and even product offerings to better serve their customers.
No. 1 – You’re not their top priority
Even without financial hardship, most consumers find themselves at one point or another facing the idea of not being able to service all their debt each month. Consumers often consider things like timeshares as luxury items and may decide to service other debts first as a means of prioritization. Our agents are trained to counsel and educate borrowers on their financial obligations and compete for wallet space with other debts and bills. Often, we need to “re-sell” the product to invigorate the customer and tap into their original reasons for purchasing the product. We work with each customer to ensure best-case debt prioritization.
About the author: Wade Burns is the director of contact center at Equiant, one of the United States’ leading timeshare servicers with a portfolio that exceeds $1 billion and includes more than 155,000 individual consumer loans. Its array of FinTech products and services includes loan receivables and maintenance fee servicing on a fully hosted web platform, PaaS receivables technology, point of sale merchant processing with PCI Level I compliance, document custody (including digital), integrated payments, integrated reporting, integrated communications and now integrated contact center tools for early stage recovery and delinquency control. To learn more about Equiant’s industry-leading security and receivables servicing, call Peter Moody at (480) 636-4888 or visit www.equiant.com.