Once an organization has decided to use an agency to collect on its bad debt, it must decide when it should start placing its accounts with the agency. While there are many pieces to consider for its own placement process – what information to collect, what information to turn over, how to place accounts securely, among a multitude of other factors – one of the most critical policies, and one which will have a definitive impact on its collections results is when to place those accounts. With this in mind we will explore four key reasons to get placements in sooner than later.
Turning Red to Black Blog: Discussing Topics Related to Revenue Cycle Management, Debt Collection, Debt Recovery, Debt Management, Billing Operations and Billing Procedures
Credit counselors and economists having been concerned about the debt load that Americans carry for many years but as the twenty-teens begin pushing into the twenty-twenties their concern is continuing to grow. Whether it’s the survey results from the National Foundation for Credit Counseling 2018 survey finding that 25% of adults don’t pay their bills on time while 8% have collection accounts or an Aite Group survey finding that 60% of Americans are anxious about paying their bills on time and as many as half are late on paying them or a study presented just last month by the Federal Reserve Bank of New York that a record 7 million Americans are 90 or more days late on their auto loan payments, the angst centers around the feeling that America’s debt load may be reaching a tipping point.
The tax overhaul that took place last year has some consumers up in arms over their tax returns in 2019. Some of this can be traced to the loss of certain deductions but the main culprit seems to be that the IRS is making an effort to more closely match the amount withheld from paychecks with what is actually owed. So, while these same consumers had fatter paychecks over the last year, their tax returns are proving to be significantly lighter. In general, this is a good thing as the consumer isn’t allowing Uncle Sam to, in essence, use their money interest free for a year, but it is going to have an effect on tax season for the accounts receivable management (ARM) industry.
Courts are finding that when consumers sign a contract with a company and establish a bargained-for exchange they can no longer revoke consent to be contacted. This has broad implications for the collections industry as it relates to an agency’s ability to contact consumers on behalf of the clients they serve.