Nobody enjoys receiving a collection call.  They’re not like a ring on the telephone from your grandmother.  There is someone on the other end of the phone, whom you have never met, telling you that you owe money to a creditor and they know all about it.  This first impression may be difficult to overcome.  For consumers in these situations the call couldn’t end soon enough.  A call from a collection agency makes the recipient feel uneasy, they feel confronted, and they feel as though they’ve done something wrong; requesting credit in the first place, owing money, not responding to letters or requests for payment.

The fact is that the consumers have done nothing wrong.  There is always an underlying REASON a bill goes unpaid.  Similarly, the call is not intended to make anyone feel bad.  The collection call is intended as a tool for discovery.  A tool designed to a.) unveil the consumer’s current situation, b.) discern the fundamental reason for nonpayment; and c.) aid the consumer in resolving the debt.

Many consumers experience guilt and embarrassment caused by the phenomenon of Cognitive Dissonance.  Cognitive Dissonance can lead to coping mechanisms such as anger, avoidance, and even null promises being made.  By understanding a consumer’s situation, the best collectors are able to acknowledge why they would be predisposed to justify the debt, point blame, or deny that it’s even owed.  Given these inclinations collectors must rise above the stereotypes cast upon them.  A debt collector’s most valuable assets are empathy, understanding, communication, and resolve.

The truth is that the disregard of a few, give everyone working in collections a bad reputation.  If it’s your goal as a Debt Collector to harass, abuse or belittle consumers then you 1.) don’t deserve to call yourself a Debt Collector, and 2.) need to realize that it is high time you find a different occupation.  The collection industry is simply not for you!

As a Debt Collector gratitude comes not only from our many clients, the charities that we donate to and the volunteer work we perform, but also from the consumers we aid.  Having a lingering debt can be very strenuous and extremely stressful situation indeed.  What’s worse is the potentially helpless feeling of being in a precarious position, wanting to pay, and believing that you won’t be able to.  This is where the Collector comes in; it is our job to find suitable and creative payment solutions right and proper for the consumer as well as apposite for our client.  During the course of a collector’s career they will have accomplished this literally thousands of times over.

It never ceases to amaze me, as a debt collector, how many consumers are truly appreciative that you have helped them in some small way.  There are those individuals who instinctively, “just want to pay the whole thing right now:” It’s only after you analyze their debt to income ratio and qualify them for a much needed payment arrangement that they are grateful and realize what unnecessary hardship paying the entire balance off immediately could have and would have potentially caused them.

Here’s what one lady told me just yesterday.  We set her up on a biweekly payment plan to have the debt paid by December, she expressed “I’m glad to have creditors like you who help me to resolve these [bills],” Mrs. Moore, IN.  Another gentleman, Mr. Stewart, RI, is a small business owner who’s also been struggling in the current economic climate.  It only took about twenty five minutes and we were able to qualify him for a 3 month payment plan.  He says to me, “Everyone who I’ve talked to in your company has been so professional and you’ve really helped me out here.  I’d like to talk to you about my accounts receivable issues I’m having and have you represent me.”  Similarly, a woman called me just last week, her 60 day payment arrangement complete, and wanted to know if we were hiring.  Mrs. Rogers, MI remarked “I want to work for a company like yours.”

 These are just a few of the stories I have had the privilege to experience as of late.  Too often there is a negative “stigma” shrouding the good that collection agencies contribute to the community and economy at large.  I must confess.  Being a debt collector is, beyond a doubt, a rewarding career.

This week we held training for all of our managers on how to effectively manage employees. We already pride ourselves here on being very honest and fair to our team and we are always looking for ways to create a better work environment and show our appreciation for the hard work that they do on our behalf. Working at a collection agency is not always easy. It can come with a few tough days here and there and at some points is very demanding. As with any demanding industry, the need to set the tone and create a positive working environment is critical to growing a business and helping your team grow their careers. Below are my top take-away’s from the training:

-Be fair.  Stay consistent in what you say and how you treat employees. 

-Set expectations from the beginning.  Be clear and communicate often about what is expected and acceptable.

-It is okay to say I don’t know.  As a manager you don’t need to know it all, just be willing to get an answer and promptly respond.

-Manage to your Team. What type of management style do they best respond to, and different individuals will respond to different types.

-Stay even tempered.  “Don’t let them see you sweat.”  Stay in control under all circumstances.

-Lead by example.  Get in the trenches and be an employee that you would want on your team. 

-Stay Positive.  Avoid being negative and help others avoid it also.

-Have confidence in yourself and in your decisions.  You are a manager for a reason. 

-Don’t avoid issues.  Communicate before things get too out of control.  

As a collection agency, we try hard to stay focused on our clients while making sure our team is well taken care of and at the top of their game. Our clients deserve it and the consumer deserves it.

On April the 28th, a week after celebrating my 35th birthday, I was experiencing a normal morning at American Profit Recovery when one of my coworkers  asked “Hey Mike, don’t you live in Muirwood Apartments?” I responded “yes” to then be told by that employee that one of the buildings was on fire. I moved over to her desk and my jaw hit the floor when I realized that the building on fire was mine.  I rushed home to find my apartment building in flames and actually laughing because I was in shock and didn’t know how to react.

Over the next few days I agonized over how I was going to put everything back together with the limited amount of money that my renters insurance company was going to give me. Everything I owned fit in the back of my car. I had no clothes, no furniture, and although I was grateful to have what I did, nothing that I had left  except for my iPod was really that important to my everyday existence. I returned to work after the smoke cleared (figuratively and literally) and was greeted by one of my coworkers in casual dress. I asked him how we got casual and he responded with “you will see.” I checked my email to see what I needed to do to get this benefit myself and saw nothing. When my manager Greg arrived I asked him what the deal was. He asked me to come in to the conference room and let me know that my coworkers had all chipped in money to donate to me to help replace some of my loss. I immediately began to well up with tears and had some trouble not balling (which I would later do on a conference call). It turns out that the amount that was raised was pretty significant and through the efforts of Jeff Spurgess we were able to use that money to get an amazing deal on enough furniture to significantly furnish my new apartment.

Never have I worked anywhere that had the amount of good hearted, generous people that American Profit Recovery does. I know I have already said thank you to many of you either in person or by email but my mother also wanted to find a way to say thanks.  She has been bragging to friends and family about the gesture but wanted to do something more, so she has donated $300 to Making Strides on our teams behalf.

Her and I would like to both say thank you to everyone for what they did. I am, as I have said on other occasions, very happy to call APR home and it makes me very proud to do what I do and be part of this great team. In an age where the stigma around our industry continues to grow, I feel confident that we are doing it the right way and do not represent the bad apples. Hopefully someone can see this and it will help further promote the industry and this company in a positive light.

Check out my new home:

My New Living Room

The week before I cannot wait for it to be over … the week after I am sad to see it go.

Employee week is an idea I borrowed from a friend who used to RAVE about where he worked.  When someone appears to like their job so much you have to just ask why?  His answer was simple – “they know how to treat their employees.”  So when HR became one of my responsibilities here at APR I thought – I want our employees to say the same thing.  And 4 years ago I started Employee Week.

The week has grown and evolved based on the feedback we get year to year and how our company continues to grow and mature.   This year for instance, we added the charity element.  We had the opportunity to pay money to see other employees dressed up as Uncle Sam (since our theme was All American.)  I think some employees paid more to NOT be Uncle Sam than others had to to get someone to be but in the end we raised almost $1,000 for Making Strides in 3 states.  A coworker looking hilarious while raising money for charity - what is better than that?

It was simple to get our ownership team on board from the beginning even though that required them cooking breakfast … doing a little manual labor … and even sharing some  embarassing high school pictures.  But one of the main reasons I came to work for APR is shown in their excitement and attitude about this week.   Although productivity may go down slightly … to see our teams interact and smile and laugh is obviously well worth to them and makes this company a place I want to work.

I knew this week achieved all that I had hoped when one of our employees mentioned that her friends saw pictures of her tagged on her Facebook Page from “all the fun stuff she get sto do at work.”  She agreed that she worked at a great company … you might even say one that knows how to treat their employees.  

Check out the video below to see some highlights from this year’s “All American” Employee Week!

Although we are still coming through crazy economic times, mortgage rates are currently at an all time low leaving many wondering if now may be the best time to buy a house. Rates have recently dipped below 5% for a 30 year fixed and even lower for a 15-year fixed mortgage. These exceptionally low rates mean it may be the best time to buy a house and definitely an opportune time to refinance your mortgage.

However, many people may not qualify for a new loan when their credit scores or job history are taken into consideration. As always, a good credit history will give you a greater advantage. One of the first things a mortgage broker will find out is what your credit score is.

My time spent at a collection agency has helped me see the benefits afforded to consumers who properly manage their credit scores. Having good credit does matter and it is never too late to begin strengthening your credit score. Even if you have filed for bankruptcy, you can begin to rebuild your credit the day your case is closed. Simple, yet responsible habits like paying your bills on time, using only a small portion of your available credit and not applying for too much credit at once can give you a strong score and more opportunity. Properly managing your credit score will provide you with more chances to obtain a solid financial future.    

If are looking to refinance your mortgage at this time, be sure to consider the costs of refinancing against how long it will take you to recoup those costs. If you are not planning to be in your home long enough to recover expenditures, refinancing could be a bad idea. The longer you stay in your home exceeding the break-even point of your total refinancing costs, the more you will benefit. Be sure you are on the road to a solid financial future by properly managing your credit score in order to take advantage of unique prospects as the economy gets back on track.  

As always, pay your bills on time, make good on any financial commitment that you make and if you do get in trouble with paying your bills, don’t ignore the calls. You can work out arrangements to make payments and keep your credit intact, making it easier to refinance and do other things with your money and credit.

Last week Barry Jennings, Greg DeSana, and I were fortunate enough to attend the ACA’s annual convention in Washington, DC.  The convention was held at the Gaylord National Hotel and Convention Center along the Potomac.  We also got the chance to take in a ballgame at Nationals Park, and got to see the San Francisco Giants (my adopted team from my years in California) defeat the Washington Nationals.  More importantly, we got a chance to see what challenges and issues are facing our industry. 

There were meetings on many compliance-related topics, question and answer sessions with industry savvy attorneys, as well as a trade show featuring many new technologies.  Perhaps the most eye-opening for me was a speech from the Commissioner of the FTC, Julie Brill.  She discussed a recent report to Congress focusing on debt collection litigation, which was titled “Repairing a Broken System.”  Her speech dealt primarily with identifying improper practices in litigation against consumers by debt collectors, but it took the tone of an admonishment of the entire debt collection industry.  Her speech became for me a reinforcement of how vital it is for us as debt collectors to stay proactive when it comes to compliance with collection law.  The public (and so it seems the government’s) perception of our industry is mostly negative, and the few debt collectors and agencies that do not comply to the laws have damaged the reputation of our industry and it’s vital economic role.  

Now more than ever, it is essential that debt collectors understand and properly interpret the law.  The debt collection industry is still governed by laws that sometimes refer specifically to out-of-date practices such as “collect calls” and “telegrams.”  The FDCPA has simply not adapted as fast as technology, and that has left for wide interpretations of current collection practices.  Those companies that resist change, and are not willing to alter their collection practices based on up to date court rulings are exposing themselves to litigation, as are the companies and collectors who practice unethical and unlawful collection tactics.  This helps foster a negative impression of the industry as a whole.

I believe our attendance at these conferences, and our continual education in compliance is vital.  Equally important is our continuing to update and practice policies and procedures that strictly follow the laws set forth in the FDCPA, and in some instances even exceed them.  I came home encouraged by the fact that American Profit Recovery is already an example of what is right with the debt collection industry, and am proud that we continue to take our responsibilities as legitimate debt collectors as seriously as we do.  I also believe that APR has made it a normal business practice to welcome and adapt to change when it comes to technology and legal compliance.  My thanks to Barry for inviting me to this year’s conference.  It was a great experience, and a lot of fun!

As a partner in a collection agency, I hear a lot of stories from both sides of the fence. Some of the stories are how people cannot pay their bills and others are from clients of ours that either tell me about their cash flow issues or in some cases, how they’ve gotten a little creative in getting people to pay. Their creativity coupled with a little extra help from us has kept them on a path of profitability as well as happy customers and employees who still get paid because cash flow is good.

We always caution our clients to follow the laws when getting creative as a collection agency and others must follow these laws when trying to collect on a debt. As long as you are following the law, there are many things you can do internally to help you get paid a little quicker. Take a look at this article we found in the Wall Street Journal and then take a look inside your business and see what you can do to reevaluate your internal accounting procedures.

http://online.wsj.com/article/SB10001424052748703394204575367440017538312.html#articleTabs%3Darticle

In a letter to the editor today in the Miami Herald, Rozanne Anderson, CEO of ACA International speaks to the “Bad Apples” in the collection industry. She makes no excuses for the collection agencies that don’t follow the rules and talks about how they work quickly to resolve any complaints to restore the reputation of the collection industry.

She goes on to talk about how consumers have rights, something we totally agree with here at American Profit Recovery. We’ve always thought that way. Every consumer we call on should be treated with respect and that’s our way of doing business. Our entire company has pledged to treat everyone with respect and they proudly display that pledge at their desks. See the video here. http://www.youtube.com/watch?v=Hq65d-4gGRQ

While we do work hard to treat everyone with respect, we cannot lose sight that our job here is to keep a business afloat by improving their cash flow. The collection industry seems too often to be on the defensive due to those few bad apples. In fact, we as a collection agency return countless dollars to these businesses, many of the small businesses that absolutely need their cash flow to pay their bills including that of their worker’s salaries.

Read Ms. Anderson’s letter to the editor here for a more complete view of the ACA’s philosophy on debt collection.  http://www.miamiherald.com/2010/07/10/1724007/debt-collectors-arent-all-bad.html

I was recently forwarded an email from one of our leaders on our sales team and it made me realize (once again) why we do what we do here. It’s hard for many to grasp this if you owe money and don’t pay it back but we are here to help people. My last blog was about how we help people continue the American Dream of owning their own business. We are reminded almost daily of the impact we have on the small business owner and their ability to stay on top of their business especially during time such as these.

The email I received was from an office manager of a client who just wanted to thank us for being his partner. He said that through this collection agency, he was able to streamline his receivables because of our APR web service, and did not feel the need to micromanage his late-paying accounts. They were in good hands.

He also went on to say that he actually feels more relaxed about is accounts receivables and has actually had more time lately to spend on other important tasks as well as spending more quality time with his family. Yes, the right collection agency can do this…

Now, here’s the real newsworthy item in this whole thing; He looked so good to his bosses that they actually gave him a raise for all the great work he had done to improve the company’s cash flow. Our own Andy Yavello made that promise to him that he’d look good as a result of bringing in APR. I think we more than delivered.

If you want to improve your cash flow, free up some staff time (including your own…) and look good in the process, I think you need to talk with us.