"When I first started out in collections, we were taught to have a "tough guy" attitude," recalls one veteran collector. "The delinquent customer was a deadbeat, and whether the person was one month or six months late, we came down hard. It wasn't uncommon to say 'I need you to pay your past-due amount today or I'll start legal proceedings and mean it!" But today, it's different. I'll say something like, "How much are you short of the past-due amount?" and then we'll work out a mutually agreeable arrangement to bring the account up-to-date.

Just what, beyond the Fair Debt Collection Practices Act, has caused the change in attitude toward collections practices and the change in collectors' behavior? Several credit managers offer their thoughts:

"Today's customers are more savvy," says one. "They know the legal do's and don'ts of collections and will set collectors straight if they seem on the fringe of violating federal or state laws or the self-imposed strict code of ethics that our company adheres to."

"We're a retailer that provides and services credit accounts for our customers," says another manager. "Even if they're behind in their payments, we hope they'll keep shopping at our-stores, rather than at our competitors, and pay for their purchases with cash."

"We're a bankcard company," says a third manager. "We used to use the threat of revocation after 60 days as our primary collection tool. Today, it's different. Our parent company offers a lot of other services besides credit cards, such as consumer loans, checking accounts, and savings accounts. Our delinquent customers are, or may be, in the future good candidates for our other services, and we want to keep their business whenever possible."

Working Together Improves Business

Treating overdue accounts as customers rather than debtors means trying to find ways to get a debt paid and still keep the account buying from your company. There are several good reasons to treat your overdue accounts with a light touch:

Temporary difficulties. "Of all our customers, fewer than 4% are delinquent at any given time," says one manager. "Many of these are in collections for the first time. Most of these customers are not deadbeats. They're experiencing temporary financial difficulties that will be resolved. They want to preserve their credit, and they're willing to cooperate if you handle the situation from a customer service approach rather than a combative one."

More than one creditor. "Once a customer falls behind in payments with us, we realize that the customer is likely to be delinquent with a number of other creditors," says another manager. "A customer service attitude can mean that we, rather than other creditors, will be the first to be paid once customers get back on their feet."

Communication increases goodwill. "I really think of myself as a financial adviser," says one collector. "A customer service attitude means that I listen to customers and they listen to me. It's amazing. Once they know that I'm not their adversary, I can often help them find sources of money that they haven't thought of, and we work out payment arrangements that they can keep."

Less stress. "A customer service attitude is just less stressful for me," says another collector. "I used to take a very superior attitude with delinquent customers. Now I've learned to be nicer, and you really do attract more flies with honey! When I am friendly with customers, they're more likely to cooperate with me, and my whole job is less stressful."

No Quick Fix

If you have collectors who are using the traditional approach to collecting and you would like them to become more customer service oriented, there's no substitute for training. That training should include:

Reminding collectors of the positive role they play in keeping credit affordable and working with customers to help them through difficult times.

Cultivating professional behavior, including good listening skills, self-motivation, assertiveness (rather than aggressiveness), and positive attitudes.

Developing a collection call pattern that supports a customer service approach including educating and motivating customers and working with the customer to negotiate successful solutions.

Encouraging positive phrasing for questions: "What day did you send the payment?" or "What's the check number?" rather than "Did you really send a check?"

Working to improve collectors' telephone personalities and voice image (tone, volume, and rate of speaking).

Helping collectors understand the reasons for delinquency. Teach them to differentiate between short-term problems such as unexpected expenses and long-term difficulties such as serious illness. Teach them how to adjust their collection approach to fit the reason for delinquency.

Giving collectors customer service tools, including negotiation skills, good questioning skills, knowledge of various sources of money, and basic approaches to educating and motivating customers.

Giving collectors skills for dealing with angry customers in a calm and effective manner. Also, teach them to handle calls so that they don't incite customer anger.