07
Apr

Payday Loan Collections: How to

Hello Payday Loan Fan,

Insight & Wisdom in small dollar lending. Digging down below the media headlines…

Loan defaults are on the way up!  The good thing is that transaction volumes are increasing as well.  As the economy changes, these are the facts!

So, this month we asked the folks over at few of the sub-prime consumer data scrubbers to contribute their thoughts on how to collect from those clients that fail to live up to their agreements with us.

Enjoy and learn.

Why We Love Complaints & What You Can Expect!

Yes we received another complaint today!

In fact we receive these types of complaints every day.  AND WE LOVE THEM!!

Here’s the latest complaint received by our office (the only modification to this complaint is the phone numbers and last name):

“I have left numerous message’s regarding my account on check #1248 that has been paid in full. Please update your system and contact me asap @ 909-999-9999 cell or @ home 951-999-9999. This matter is very urgent and requires your immediate attention. I cannot write checks!”

“Thank You,
Tim XXXXXXXX”

So, why do WE LOVE COMPLAINTS?  Read on and learn. [FUNNY SIDEBAR: Many of these folks also come to us via eCheckSystem ]

All right! Something like 7 to 12 out of every 100 loan customers fail to pay you as agreed; unless you’re an Internet lender, then expect up to 25 out of 100. I’m referring to FTD’s – First Time Defaults.

Their references either don’t exist or they claim they never heard of your customer.

That employer phone number provided by your borrower turns out to be their sister’s cell phone.

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The 3 collection letters you sent to your borrower’s “residence” were all returned; stamped “un-deliverable – no forwarding address.”

What is a lender to do?

Luckily, you do have your customer’s key information such as bank account number, social security number and a copy of their driver’s license.

So every story has a happy ending, right?

Sub-prime consumer data scrubbers to the rescue. You do have an account with a sub-prime consumer data reporting database, right?
If not, go here Sub-Prime Consumer Reporting Agencies and get hooked up!

Yes? OK then. Log into your account with your unique user ID and password. Enter your “bad customer’s” data and bank account information. Then, sit back and relax!

Eventually your “bad customer” will get her (OK, so it could be a him) life back together. It could take two weeks, three months, six months, a year, maybe even three years or more.

BUT, EVENTUALLY your “bad” customer will need to open a new bank account (yes, the service tracks by Social and driver’s license which are both required to open bank accounts) or they will need to use that check or debit card to make a purchase at their local grocery store. Then you’ll get them!  Finally, redemption at last 🙂

You see, the customer’s new prospective bank or payday loan lender will check the Shared Check Authorization Network (SCAN) database BEFORE allowing the customer to open that new checking account or get another loan. If your “bad customer” is applying for another loan, your “credit bureau” will provide you with their updated contact info.

This scenario happens every day; by the thousands.

If we don’t get your customer at the bank, we’ll get them at Wal-Mart or Target, or your credit bureau will alert you.

Eventually you get them. And eventually, YOU GET YOUR MONEY.