Taking a kinder approach to debt recovery
Written by Cheryl Long
Produced by Tom Cunningham
The collection industry has come a long way, says Manny Cabral. Once considered heavy-handed and prone to intimidation tactics, many in the business are changing their approach in favour of kinder, gentler methods.
The executive vice president and chief operating officer of D&A Collection Corporation, based out of Mississauga, Ont., said the days of simply demanding payments are dwindling. Instead, collecting debt takes a certain finesse. Businesses that hire companies to recover missed do so by taking into consideration both brand reputation and lost revenue.
“We definitely balance the two and take the consumer’s situation into account,” he said. “Businesses equally regard recoveries with reputation.”
D&A was founded in 1988 by Cabral and company president Phil Morrison, who launched the business as a regional collection agency. As the company branched out into various sectors, they evolved into a national third-party collection provider with an additional office in Montreal that is currently poised for expansion. Today, they employ about 200 people across Canada and are in the process of rebranding the business under the name, D&A Group Services (www.dagroupservices.com ) to better reflect a wider range of services for their clients.
First-party division part of future growth
As the collection industry continues to grow and evolve, D&A is looking for different ways to expand their own lines of service. One area they are developing is the first-party division that would take on a company’s accounts receivable business. They would operate as an extension of the company, offering the expertise gained from decades of revenue collection. There are also opportunities to conduct “back office” work, whether it’s managing mail, verifying information or taking on other administrative tasks.
The industries they service are diverse, including financial, education, telecommunications, insurance, utilities, municipalities, government agencies and commercial corporations. Their largest clients, many of whom are blue chip corporations, are typically financial institutions and insurance companies, followed by businesses in other sectors such as educational institutions and utilities. D&A’s commercial division deals with business to business accounts. The premise behind debt collection has changed little over the years; once companies have exhausted their efforts in securing owed payments, D&A steps in with a process tailored to each client and positioned for the best possible results.
It may begin with a letter to the customer owing payment, indicating that their outstanding account is now being serviced by D&A Collection Corporation on behalf of the client. After a specific time period — as many as five to seven days — a D&A employee will, as prescribed by legislative guidelines, make the first phone call in an attempt to secure payment or set up a payment plan to help that person deal with their debt. Under strict legislative guidelines and under ever stricter client directives, D&A Collection Corporation generates revenue while preserving the reputation of the organizations it represents. This is accomplished through effective dispute resolution, conflict management, and effective listing. D&A representatives have the responsibility of making consumers understand their obligations to the debt while protecting the client’s best interests.
“Every client at the end of the day is extremely different,” Cabral said. “Companies are companies. They have to drive revenues, create profits for shareholders and owners but when you’re dealing with someone in the collections department, everybody has a preferred approach. We have to make sure we adopt those approaches and give them what they’re looking for…”
Treating people with respect and integrity
That approach is reflected in D&A’s values where they aim to treat people with respect and integrity and conduct themselves in an honest and ethical fashion. At the same time, they have a mandate to achieve the maximum results for their clients while preserving their brand reputation.
“Collecting money is an art,” Cabral explained. “For the most part, people want to pay their bills; it’s do they have the means to pay it? If I’ve lost my job and there’s some illness in my family or the marital status has changed, that becomes a concern. You have to understand the person you are speaking to and their personal situation.”
That level of understanding is what makes the team at D&A stand out among their peers. Many of Cabral’s employees have been with the company for many years, some dating back to the early 1990s. In an industry where trust is important, D&A’s clients enjoy a level of consistency and familiarity that isn’t always apparent in the collection business. And there’s no question that it’s not an easy industry for its employees, which makes D&A’s retention rate even more admirable.
Cabral said the secret to the company’s staffing success is the high level of confidence he has in his team. “Employees want to be coached. Our management team has been a vital part of our success. I consider them to be the best in the industry. I have one expectation of them; coach your staff to be as good as you are and support their efforts.”
Teaching students how to manage debt
Collection is a performance-driven business and helping their clients recover outstanding debt is the priority. But at the same time, the industry is working to educate consumers about the dangers of spending beyond their means. Educational institutions often turn to companies like D&A to deal with missed payments and most of the time, those people are young adults who have just finished school and are juggling expenses and school debt. As part of their educational efforts, D&A will go into post-secondary schools to give seminars and offer some tools that will help graduating students make their payments. They emphasize the fact that while debt can’t be avoided, it can be successfully managed, Cabral said.
For those who just don’t know where to start, D&A’s staff can help set them on the right track. “Covering this hole and creating another one doesn’t help the individual,” Cabral explained. “If you have the means to pay, let’s work something out and get your financial situation back in line.”