How Debt Collectors Are Supporting Consumers During COVID-19

Right now, many businesses depend on every payment to keep them afloat. That means timely debt recovery is more important than ever.

However, insensitive collection attempts can alienate customers, increase complaints and harm your hard-earned reputation, hurting your business.

How can you collect what’s owed to you without harming your customer relationships?

The good news is, with the right consumer-centered approach, debt collectors can actually help your customers get the extra support they need during the COVID-19 pandemic by providing:

• Quick answers to their COVID-19-related concerns
• Flexible payment options for their unique financial situation
• More self-serve options, such as IVR and payment portals

Here are three reasons why debt collection should be an ongoing part of your COVID-19 strategy.

Inbound Calls Are on the Rise

Numbers show that consumers want more help with their accounts, not less.

With social distancing in place, more consumers are depending on phone calls to get the support they need.

ACA International reports that consumer calls to debt collection agencies have risen in recent months, stating: “Consumers sought help managing their finances and exploring hardship options because of the ongoing COVID-19 pandemic.”

A DialogTech survey shows increases in inbound calls across most industries, including a 53% increase in inbound call volumes for Financial Services between February and March of 2020.

Customers aren’t just calling for support – they’re also calling to pay.

With more disposable income due to reduced entertainment, travel and social expenses, consumers who aren’t in hardship are choosing to spend their extra cash paying off debt.

A September WalletHub Credit Card Debt study found that consumers paid down $58 billion in credit card debt in Q2 2020, “the first time in more than 30 years that credit card debt has dropped from April through June.”

“Many people are no longer eating out, driving to work, going to concerts or bars,” says Amir Erez, Cedar Financial President. “As a result, we’ve seen an increase in payments for consumer accounts.”

Long Call Wait Times Are a Huge Problem for Creditors

While consumers are seeking more help on the phone, they aren’t necessarily getting it.

Customer service has suffered during COVID-19 as businesses struggle to stay afloat. Staffing shortages, hasty transitions to remote work and lack of other support platforms have made it difficult for stressed customers to get the help they need during the crisis.

The CFPB reports an influx of complaints from frustrated consumers who can’t get through to creditors:

“Consumers are reporting hold times of several hours. For those who are pursuing payment options, some described no method other than phone to access potential options.”

Debt collectors provide additional customer support so creditors can focus on their business.

Debt collectors are helping strained businesses provide fast, flexible support for their customers during the pandemic by sharing some of the call load, proactively resolving COVID-19-related issues and actively working with consumers in financial hardship.

Plus, forward-thinking collection agencies offer critical technologies that creditors don’t always have, such as multichannel support, interactive virtual agents (IVR) and self-serve payment portals.

These digital solutions can significantly reduce friction for consumers, freeing up badly needed resources businesses and increasing customer satisfaction and payment outcomes.

Debt Collection Complaints Have Decreased 40%

You may be thinking, inbound calls are fine, but won’t outbound collection calls cause complaints?

Despite alarming headlines in the news, debt collection complaints have decreased.

While outbound collection calls usually do top the CFPB complaint list, recent reports show that debt collection complaints have declined during the pandemic.

A recent CFPB Complaint Bulletin reveals that only 12% of COVID-19 complaints are about debt collection, with mortgage (19%), credit card (18%) and credit reporting (18%) complaints taking precedence.

A September 2020 WebRecon consumer complaint report shows that consumer complaints with the CFPB are down 40.1% from last year, reflecting how debt collectors are successfully helping consumers manage their finances with flexible emergency options.

“People are never happy about having a debt – but when we ask them for feedback after a call, they’re usually happy we reached out to help,” says Kaitlin Lindros, PR Manager at Cedar Financial. “We’ve gotten so many wonderful reviews just thanking us for our patience and professionalism.”

When consumers do complain, collection agencies are responding right away, maintaining a stong 97% timely response rate with the CFPB.

Give Your Customers the Compassionate Support They Need

At Cedar Financial, we don’t just collect debts – we provide support and understanding when people need it most. During an emergency, this is even more important.

“Most people just want to know that someone understands what they are going through,” says Justin Franklin, Collections Manager. “People feel stressed, anxious and out of control – we can’t change their situation, but we can let them know that their experience is valid and help them take the first step.”

Our People-First Approach can help you repair and maintain relationships during COVID-19, while providing the support and flexibility your customers need to manage their accounts.

Read our COVID-19 case study or request your quote today.

Resources for Consumers

Resources for consumers facing the impacts of the COVID-19 pandemic are available on the CFPB website: www.consumerfinance.gov/coronavirus/.

*The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information.