Debt Collection Disrupted

  • Written by T. Steel Rose

rose steelDriverless cars are being tested and flying cars are predicted to arrive by some futurists in five years. Technological disruption is nothing new. How swiftly it changes an industry is the surprise.

Not that long ago there was no Uber or Airbnb. It’s now clear to see how they disrupted the transportation and hotel industry. Uber took an uncomfortable process (taxicabs) utilized a common asset (your car) and coded an engaging technology (your cell phone) to pay a much more pleasant driver to take you where you needed to go. Airbnb offered a similar proposition. They utilized a common asset (your home) and coded an attractive website for home and cell phone and disrupted the hotel industry. Amazon began with a similar proposition. They created a simple one-click ordering website for resale items like books.

When Uber, Airbnb and Amazon began they had one other silver lining in common. They all evaded taxes. Although, it’s really called tax avoidance until you cross the legal divide. Tax avoidance and paying debt avoidance have one thing in common. If the avoider is successful, someone else has to pay their way.

Venture capital is placing big bets on financial technology to disrupt uncomfortable processes. Take an uncomfortable process (reminding people they owe you) utilize a common asset (existing past due debts) and code an engaging website optimized for your cell phone, that incidentally has no tax consequences.

The convergence of the top accounts receivable professionals with the top technology providers for this necessary process will occur at Receivables Advisor’s CollectTECH 19, November 18-20 in Ft. Worth, Texas. This is not a new idea. CAT EXPO brought the best and brightest together for years. There, technological innovations were introduced. What we know as virtual collections was pioneered by Debt Resolve and Apollo. Ten years ago virtual collections was in its infancy. Now people are pondering when it will be the primary source for collections.

Future TECH

Talking like a futurist, I see two trends continuing: 1) First party and third party collection will be more integrated utilizing technology and, 2) text and email will become the primary methods for collecting past due debts.

My bold prediction is: those who support the taxing authorities will pioneer the future tech application for collections. Look to Massachusetts, California and New York City to follow Los Angeles in finding the next great collection technology solution.

I look forward to a day when someone who has lost the trust of creditors can be contacted, begin a payment plan and see their credit score improve each month. They can reach certain milestones and receive notifications like, “Congratulations, your credit score just improved to 600, you can be trusted to get a mortgage to buy a house again.”

There is something intrinsically fascinating about collections. When you loan someone anything or provide them a service or product in exchange for payment you are trusting them. When they violate that trust they have betrayed the trust you placed in them. When they can’t pay because of medical or other legitimate issues, we understand. When they have the means to pay but do not, and continue to violate the trust you placed in them, it stings.

Therefore, the business processing outsourcing of the collection industry takes on the hard work of asking people to be responsible and make payments toward what they promised to pay in exchange for whatever they received. It’s like parenting; you are reminding them they have a way to become trustworthy again. The problem is parenting is hard work. People don’t mind avoiding responsibility.

Top Receivable Professionals

This is an honorable profession built on helping people rebuild trust. Therefore we will continue our time-honored tradition of recognizing top professionals with an award ceremony at the conference. This year, after the Top 50 Professionals are awarded individually, the Most Innovative Agencies will be awarded and the Top 50 Products will be awarded. Then, the highlight of the evening, the Most Innovative Product, the Top Product and, drum roll please, the Professional of the Year. Be sure to cast your vote. See the ballot on page 28.