Rule number one for collectors when negotiating with an individual is always ask for the balance in full. If the individual says that is not possible, then rule number two for collectors is never be the party that throws out the next number in the negotiation.
Those sage words of advice were shared by a pair of industry professionals during a webinar hosted earlier this week by AccountsRecovery.net and sponsored by Microbilt. The speakers – Donna Nicholson Stief from Credit Bureau of Lancaster County and Greg Ruffino from Williams & Fudge, agreed that if the individual is not able to pay the balance in full, then he or she should be the person to suggest what can be paid, rather than have the collection agent make a suggested payment amount.
“Don’t show your cards,” Nicholson Stief said during the webinar. “There is a wrong way to collect. You’ll cut yourself off at the knees. You want the debtor to say it first. You can get there by having the collector say something like, ‘Tell me how much you can handle and I’ll see what I can do with that.’ ”
When the individual makes a suggested payment option on the debt, collectors should not immediately reject the offer if it is too low, Ruffino said. Instead, collectors should use language to make it clear that they are in the individual’s corner and are committed to helping him or her get out of debt. One important mantra to keep in mind, Ruffino said during the webinar is that it’s nearly impossible for someone to negotiate their way up into getting a higher payment; it is always easier to negotiate your way down into a compromise.
Negotiating is a skill that not many collectors have when they first start working in the industry, the speakers noted. Many come from a retail background where haggling and negotiating are absolutely not practiced. Ruffino suggested that collection agencies work with collectors to get them into environments where negotiating is more common — such as yard sales or swap meets — to help collectors get practice and become more comfortable negotiating about money with someone else.
The key to being a successful negotiator is to be assertive or persistent, not aggressive, the panelists said. Collectors can be “firm and persistent and nice as apple pie all at the same time,” Nicholson Stief said. “You want the collector to sound like they want the debt to be paid.”
In attempting to be persistent and assertive and not aggressive, the collector’s tone of voice matters more than what the collector is saying, Ruffino said.
When negotiating, it’s important for collectors to know they have options beyond either accepting a full payment or immediately putting someone on a payment plan, the speakers said. If an individual wants or needs a few extra days to make a payment, then the collector should be trying to get a higher payment from that person in exchange for the extra time, Nicholson Stief said. If someone wants to make lower payments on a monthly basis, then the collector should be asking for a higher down payment in exchange, Ruffino said.
“You don’t get what you want,” Ruffino said. “You get what you negotiate.”