Powered by NexusBeyond, Nexus Online Media

Executive Credit Management, Inc.
Your Applicant Screening and Debt Collection partners for over 20 years


Auto-Dialers and Debt Collection the Good, the Bad and the Ugly

Auto-Dialers have become a major tool in the Debt Collection industry for one reason. They dramatically reduce the amount of human time invested in collecting a dollar. Robots don’t get paid and have all the energy required to out call dozens of humans. While debtor response to auto-dialer calls is much lower than their response to human calls, the auto-dialer, like the energizer bunny, can make a lot of extra calls.

This dramatically increases the profitability of making calls for the Debt Collector. While fewer contacts are made, these good contacts are funneled directly to a debt collector who spends all the time speaking to debtors. This maximizes the effectiveness of the Debt Collector.

This is extremely efficient use of Debt Collector time and allows the Collection Agency to simultaneously charge less per dollar collected and make a higher profit. Except for one little fly in the ointment, this system would be perfect.

While dramatically increasing internal productivity, the use of auto-dialers significantly reduces the amount of debtor responses and, thereby, the overall amount of money collected.

For example, if the use of an auto-dialer reduces to collection cost by half while reducing the overall collections by half, the Clients could save perhaps twenty percent on all collections which would be about half of the collections made by human callers. Twenty percent is a very nice saving in costs. The problem is that half the collections do not get made. Not ever.

Is it better to pay one third to get back $100 or to pay twenty-five percent to get back fifty dollars? The difference is getting back $66.67 or only 47.50. This is only one part of the Auto-Dialer equation, so let’s look at the entire picture.

The Good:

Robots make calls for free and this makes a Collection Agency more efficient. It should lower your collection fee as a percentage of what is collected.

The Bad:

Auto-Dialers are not as effective as human dialers. You have probably listened to a few and quickly hung up yourself. This will reduce the amount of debtor contact and, along with it, the amount of money collected.

The Ugly:

Auto-Dialers are under constant attack by Federal, State and Local Governments. What makes them so efficient and inexpensive also leaves them lacking any discretion. They leave their message to a given phone number with no ability to deal with wrong numbers, relatives or friends answering or a consumer who doesn’t want more calls. These problems are noted in the calling script but some consumers have no interest in listening until instructions for stopping the call are mentioned.

If the calls are repeated each day, as they usually are, they tend to push the Fair Debt Collection Practices Act to the limit. This is a litigator’s dream situation.

Just go on the internet and search for any Debt Collection Agency. You will find many ads for Attorneys eager to start a class action suit if you have been abused by an Agency.

You may not think there is anything wrong with Auto-Dialers, but how eager are you to fight a Government?

Lower rates, less money collected and a host of legal problems. Is it really better for your company?

For more on this topic:


Find us on Facebook