Digital debt collection is changing the whole collections industry, and most of us don’t even realize it! Reports indicate that more people who receive a message from a digital debt collector pay it the first time they click on the provided link.
Wondering why this method of debt collection is so efficient? Here are 6 things to know about digital debt collection and why it helps improve collections recovery rates.
1. It’s More Modern
Let’s be honest. Do you even answer your phone nowadays? Most people conduct just about everything through text and email, for the most part. A digital debt collection company operates by texting or emailing borrowers in an attempt to collect their unpaid debts. Most of us are more likely to open a text or email than we are to answer the phone.
2. There’s No Harassment Involved
When you borrow money and don’t pay it back, traditional debt collectors will start calling you… over and over again. This can be downright annoying and may even feel a lot like harassment to the borrower. In the end, most people will stop answering their phones without ever paying what they owe. It’s an ineffective process all around.
With digital debt collection, the borrower doesn’t have to speak to a human at all. This makes it less overwhelming and less of a hassle for people to repay debt.
2. It’s Kinder
Traditional debt collectors are not always known for their compassion and people skills. This makes people even less likely to repay their debts — or to respond to future phone calls!
Most digital debt collection agencies are finding through data analytics that people are more likely to respond to understanding and empathetic text messages. When they feel understood, they’re more likely to make the payment in a timely manner.
4. The Process Is Easy
The digital debt collection agency sends the borrower a text or email with a link where they can pay back their debt — and voila! The borrower will generally open the link and make the payment or call the customer support number provided to set up some sort of payment arrangement. It’s as easy as 1-2-3.
5. It’s Most Trustworthy
Phone scammers have made it difficult to trust over-the-phone debt collectors. Fake debt collection scams are not uncommon nowadays. With this, a so-called debt collector calls in regards to funds you allegedly owe — only to scam you. For this reason, many people have a difficult time trusting traditional debt collectors who call them. A text message or email often feels more legitimate and trustworthy.
6. Data Analytics Help
One of the reasons why digital debt collection is so effective is because of data analytics. In the past, traditional debt collectors used the same tactics on everyone: call, call, call again, and then eventually send a letter in the mail. Digital debt collection agencies monitor and analyze individuals for trends to help improve the odds of successful debt repayment.
These agencies collect data on things like what time of day texts or emails get opened, how many messaging attempts it takes for people to actually make their payments, and what types of language work most effectively. This analytics helps the agency determine what tactics to use in the future for both individual customers and the mass population — ultimately increasing the odds of payment recovery. This makes digital debt collection agencies effective in the long run.
These are just a few reasons why digital debt collection works! It’s a much more efficient option than traditional debt collection, making it the holy grail for any creditor who wants to recover unpaid funds.