death of debt collection agencies

Imminent Death Of The DCA Within 10 Years

death of the DCA. withing 20 yaers debt collection agencies will be gone

Can it be true that the DCA [Debt Collection Agency] industry will be no more? Is it possible that the sale of debt could be a thing of the past? Will companies have to collect their own debt or write it off? Will technology destroy the thing that compliance cannot control?

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Who am I?

I have been involved personally in lending, debt collection and debt sale for 40+ years. I have written credit and risk documents for a couple for startup finance companies. Additionally, I have worked with many a DCA.

My experience in debt sale, was that I was able to “sell” £100,000,000 of post repossession subprime auto loans. There cannot be a more uncollectable debt, yet the owners of the business pocketed an enormous and unexpected bonus.

I have organised and managed debt collection teams of up to 200. Collecting the debt, I was responsible for lending to customers.

January 2021 Update

There are so many changes to the laws regarding collecting debt and outsourcung debt collection. It is difficult to keep up to date. Especially with a blog that covers the globe. There is a constant stream of new regulations in most of the 1st word. Be it New Zealnd, China, USA, UK, and Australia.

However there is a genral theme – the debtor is getting more proectection from predatory collection processess. From AI to predictive dialling. What these solutions do not offer is sympathy or empathy. All they offer is cost savings and constant harrassment of detors.

The 1st debt collection agencies to be hit wth this global change to debt are the big DCA’s who depend on a constant stream of new debt.

In some USA states they have brought in restrictions on how many calls toy can make. Attempted calls will be limited to 7 in a 7 day period. This will include dropped calls and hang ups. If you have spoken to the debtor you cannot call for another 7 days. So if a debtor offers to pay tomorrow and does not call you. The DCA will have to wait for 7 days to make a follow up call.

Many a debt collector will be planning to circumvent the laws legally but not morally or ethically. It will take a shift in marketing from the credit grantors. As costs for in house collection rise they will be saying NO more often. Which is a good thing for over indebted customers.

Credit grantors will have to become more use to using their own credit teams and writing off more outstanding debt. And we mean writing it off and not just selling on to a constant stream of DCA’s.

Why do companies outsource debt collection or sell their debt portfolio?

Quite simple for 2 basic reasons.

  1. Too expensive to collect. Who wants to recruit, manage, and pay appropriate wages to teams of people?
  2. It is a nice bit of gravy to have. Lenders have risk based pricing into which they will have calculated their bad debt. However, when they “write off” this bad debt, they can sell it. Thus, earning themselves a bit of an extra bonus.

The DCA – Debt Collection Agency

Anyone who thinks that most DCA’s have a conscience or genuinely care about treating customers fairly are possibly misguided.

When they have team meetings, it is not about how they can benefit customers, it is about how they can get money from them. They share experiences of how they got a customer to pay, not how they helped someone write off their debt.

When the directors have meetings, it is all about margins, efficiency, and cost. It is never about customer care, unless there are serious complaints.

Why did DCA’s not exist years ago, as they do now?

Automation. Technology. Cheap and efficient banking. Email and mobile telephony. Quite simply debt collection would have been far too expensive a decade or so ago. The benefits of the internet are not helping those less fortunate — at the moment.

The Lender and The DCA

Here is the short of it. If you cannot or do not want to collect from your own defaulters:

  1. Say no to the initial application.
    1. Spend more on repayment assessment. However, that does impact the bottom line. In addition, it upsets intermediaries.
  2. Write it off. Completely. You have priced for it. Bin it.

The Debtor (non-payer)

Debtors fall into 4 categories

  1. Can pay and will not pay. Go for them with all the tenacity you can muster. It is a game for them. A game that you must win. I know this from my considerable experience.
  2. Cannot pay. Most people want to pay their debt. However, there are a multitude of reasons why they cannot. Lenders (not debt collectors) need to assess the debtor’s situation and decide to write off or move to the can/won’t pay process. How do they do that? There are numerous solutions available to them.
  3. Fraudster. Proper underwriting policies and processes should keep these to a minimum. However, when they do get through you are rarely going to collect. Write it off and learn. Bear in mind that most fraud/deception is by the intermediary.
  4. Financially naïve. They fall for the slick sale pitch. They are misguided consumerists. Educate your introducers. You (the lender) will have performance reports of introducers. Have the balls to act upon them.

By the by, finance companies and lenders fail because of fraud. Generally, at the hands of their employees or introducers.

Here Is What Will Happen.

Regulation and compliance will make it impossible for lenders to either outsource or sell their debt. If they cannot collect in house, they will have to write it off.

You have to remember that a lender can assign the beneficial rights of an agreement but not the obligations. They are responsible for how their external debt collectors operate.

DCA’s will have to use voice analysis on 100% of their conversations with clients and each other. The technology exits now as it has done for years. Yet, the lenders rarely demand use of it, nor do the debt collectors use it in compliance.

There is a lack of will in governments to demand a change in how both the lender and the debt collector operate. However, it will come.

Vietnam is already taking a stance as of September 2020. They have banned investements in DCA’s and 3rd party debt collectors.

Telephone Calling Curbed

The CFPD has made a ruling that will affect many third party collectors in the USA. Although the rules came to staggering 653 pages the most significant aspect was what they have done with telephone calling. And there is no doubt that other countries will follow suit. Here is the quote

The rule prohibits debt collectors from making a collection phone call for a particular debt more than seven times within a seven-day period or within seven days of having a telephone conversation with the debtor. It states that a consumer may restrict the type of media used by a debt collector to contact a person

CFPD

If you use or you are a third party debt collector. You will have to reset power dialers and predictive dialers. Even if the call is not answered it has been made. In addition should you make an arrangement to call back it will have to have a grace period of 7 days.

Make no bones about it, this is going to create havoc in large debt collection centres. As a lender you are going to have to consider bringing your debt recovery in house. The good news is there are some awesome solutions to be had.

The other option is to integrate bad debt pricing into your costs and write the debt off. You are probably doing this and use outsouricng debt collection as a nice add on to the bottom line. It is disappearing.

Technology Will Bite the Debt Collectors In The Rear!

Robokillers and the like, are apps that fall into the category of robocall blockers. They use sophisticated AI to answer calls. These roboblockers been downloaded 10’s if not 100’s of millions of times. They were developed to block spam calls by imitating a real person and keeping the caller on the line – thus wasting time and money for the caller.

The companies that have developed auto calling or introduced it into their collection process could be hoisted on their own petard. There will not be much sympathy.

What will happen with debtors?

There will then be a need for face to face conversations with the debtor, and that is not cheap. However, it is effective, assuming the agent is prepared.

Farewell DCA, what will you do next? If you need a debt collection list – we can help

Debt Collection Firms

If you are thinking of investing in a debt collection business you might want to think again. Firms like Moorcroft debt recovery or credit collection services have a limited window of profit.

#resolutecollections #debtcollection #debtcollector #debtrecovery #debt #debtcollectors

debt recovery solutions

The Best And Easiest Top Targets For Scammers

Debt Collection Company
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Top Targets For Scammers

The 45 – 54 year old age group is the ideal demographic for Top targets for scammers. This information is not a secret, as it is publicly available from Experian. This should act as a wake up call if you are in the group. Just when you think it is safe – they find new ways to scam and fraud you.

Why is this age group so attractive to the scammers, fraudsters, and con men?

Scammer Definition

It quite simple really. Anyone who gets you to part with money, goods or time and has no intention of paying you back. Or sending you the goods you think you have purchased. It is easier to prevent than getting anything back from a scammer.

Why Connectivity Is Important

debt collection online


A 45 – 54 year old may have children and parents. This gives the scammers triple access to your information. You, your parents, and your children might be adding details to social media to build up a picture of you. Even something as wishing someone a happy birthday on facebook can give a scammer the date of your birthday and even year. HAPPY 50th – not difficult to work out a date of birth from that greeting.

Seniority in Work


At the 45 to 54 age age group you are likely to be working in a senior role and have a decent salary. Con men would rather have high earners than low. Seems rather obvious.

Pension Eyes


You can see retirement coming on the horizon and you are actively looking for a great deal for your pension. This makes you attractive as one of the top targets for scammers Fraudsters and no ethics or morals in scamming your pension pot. The old maxim of if it appears to be too good – it is. Anything that would double your money within 10 years has to be checked by a trusted professional. A detailed internet search of the business owners should show something. If it comes up blank – walk away. Very few people have ZERO information on the internet.

Downsizing Gives You Extra Cash


Scammers and fraudsters are aware that a 45 – 54 year old might be moving into an easier and smaller home. The obvious result being that you will have substantial amounts of ready cash to invest. They want your cash and will say anything to get it. Remember that a few days of work can net a fraudster 20,000 or 30,000. This makes you the ideal Top targets for scammers.

Scammers love Mortgage Free

Top Targets For Scammers


The scum of con men will know that you are probably mortgage free. Cash that they will con you out of. They will find your soft spot be it a hobby, vocation, or a vice, and manipulate you.

Naiveite Makes for Top Targets For Scammers


This does not mean gullible. It is nothing to be ashamed of. Your typical fraudster and scammer are way more knowledgeable about what to do than you are. They have been scamming people for years – they are good and experienced!

Global and Interstate Debt Collection


Scam merchants will use the law as much as they can, so that they need not pay you. They move freely, knowing that you probably cannot. Luckily, we can remove that expensive barrier. We work free of barriers.

If you need interaste or interational help we have pages that can help you. If you are looking for debt solutions in Australia or debt collection in the UK. Have a look at our resources.

Bitcoin Scams

This could be an entire website on it’s own. The principle reason bitcoin scams are popular is that it is almost impossible to point the finger at a scammer. Fake exchanges, ponzi schemes, blackmail, fabricated crytpocurrencies, impersonation, free giveaways, phishing, money transfer,or maleware.

The actual currencies are not the problem it is the scammers. The best advice is an old one

IF IT IS TOO GOOD TO BE TRUE , THEN IT IS A SCAM

Jim Campbell

Caution is the whatchword for bitcoin. Once it is gone it is gone. Move on.

What If You Have Been One Of The Top Targets for Scammers

You can engage resolute collection to get your money back. Our experience is second to none in dealing with scammers and conmen. At the very least you will expose a con man to the world – 24/7.

Have you been scammed?

Share your experiences with us. Your story might prevent someone else being fleeced. We are particulary interested if you can give an opinion on USA debt attorneys or business debt collection specialists.

#consumerdebtrecovery #legalhelp #debtfreecommunity #debtfreegoals #debtfreejourney #resolutecollections