Having been in the industry for many years (I won’t expound upon how many – that is between me and the mirror), it amazes me at how much people think they know about our industry; an industry, mind you, specifically regulated by guidelines for the “least sophisticated consumer.” Who is that these days? Perhaps our industry is no different than doctors who are presented with a plethora of knowledge from a patient who just googled their symptoms on the internet? I know I was personally very prepared last time I went to the doctor and later found out that I had pretty much psyched myself out by my preliminary diagnosis of every deadly disease that could be associated with one little symptom. As it turned out I was completely wrong and, by the way, I am going to live! This is very similar to what we experience in debt collections.
As consumers are more savvy these days and have unlimited articles they can read regarding just about anything, yes, even collections, we often have to negotiate our way through consumer skepticism, fear and misinformation. Consumers don’t have to be scared of collections, compared to that doctor’s appointment, where I was sure of my facts and scared of the results. Asking questions is good, but ignoring the calls because you are scared of the diagnosis doesn’t help you get financially healthy. Let’s face it, very famous folks, like the recently honored Rush Limbaugh, Larry King, and Dave Ramsey, have often made scathing comments about debt collection, personal attacks about debt collectors and advised their listeners in ways that may benefit some but do not benefit all. Their advice on handling your bills that have slipped into collection is often like a doctor prescribing one prescription and saying it cures all diseases.
As one example, a statement we often hear is – “I know you bought this debt for pennies on the dollar and you will settle for less than the balance in full.” Folks are adamant and get mad at us over this “fact” they know about our industry. Let’s set the record straight, there are certainly companies out there that buy debt, but our consumers are often surprised when we honestly state, “No we didn’t buy this.” Consumers also believe that because of the “fact” that all collection agencies buy debt that we will immediately settle. Again, not a fact. Our agency services our client’s accounts. Our job is to make consumers aware they have a bill that has not been paid and then get our client the payment. Simple, right? I am still not clear why we are the bad guys in this scenario. Actually if anyone OWNS the debt it is the person who owes it. Short of going into a lengthy description of debt buyers verses debt “servicers”, the real fact is the debt is the consumers. The consumer incurred it and it is theirs technically until it is paid.
Our client’s pay for our service, after consumers received several statements alerting them to the bill before it even reaches our office; thus the client receives even less for the services they rendered than they billed to the consumer. In the end, trickle-down economics historically has proven this raises cost across the board. Everyone pays. The idea that these bills should be settled once it comes to collections seems like a bad prescription. It is clear that no consumer negotiates their bill at the check out line at the doctor’s office or check out line at the grocery store (inserted this because I am hungry). The price is the price, and you can choose a different service provider or go to a different store if you don’t like their prices. Collectors don’t set the prices. If we are sticking to the medical debt as our direct analogy, often the doctor’s don’t set the price either. If you have insurance, the balances are often set by the insurance carrier and the deductible that the consumer has chosen. With all that said, shouldn’t advice from financial gurus not be a rant on how awful collectors are but a prescription on how to manage your health care benefits, understanding your co-pays and deductibles, and what to do when your benefits are exhausted or you are a self-pay patient?
So now you know, we are here to help. We are here to get a past due balance resolved between you and our client. The gurus who often tap into controversial subjects, also tend to villainize all in an industry. There are more myths about collections we will speak to this year, but for now when you are responding to a collection letter, or a call from any agency, don’t immediately assume they bought the debt. Don’t immediately fear the diagnosis, don‘t immediately assume it is a scam, and don’t immediately think that the collector you will speak with is not negotiating a settlement because they are being jerks. Sometimes the client has authorized some wiggle room and it is okay to ask. Ask, but don’t think that being armed with information about the industry makes that information the truth for us all. We are different and are focused on “changing the face of collections.” You missed a bill, it ended up here in our office, and you can choose to do the right thing and pay or spend time arguing for a settlement because you think we buy debt. The only person who can change whether that bill gets to any collection agency is you.
Look for my next rant, “De-mystifying collections for the Most sophisticated consumers” coming soon!