Post on 16-May-2018
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Maximizing revenue recovery for public-sector and municipal utilities
Don TaylorAutomated Collection Services Inc.
Alex SiotosExperian
2©2013 Experian Information Solutions, Inc. All rights reserved.Experian Public.
Quote for today
“”
The best time to get started addressing the problem was ‘10 years ago.’ There’s still time to fix it. But ignoring the problem — just like hanging up on the debt collector — is not a great way to go.
Federal Reserve Chairman Ben Bernanke recently told Congress
U.S. Federal Reserve Board Chairman Ben Bernanke testifies before the House Financial Services Committee hearing on monetary policy and the state of the US economy on July 16, 2008 on Capitol Hill in Washington, DC. (Tim Sloan/AFP/Getty Images)
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It is important to know and utilize all of the internal and external resources available to you to increase your debtor contact success rates along with quickly reaching the debtors with the greatest potential of repayment
Not utilizing the resources available to you is like trying to fix something in your home without the right tools.
Think about projects at work where your thought to yourself, “if I only had ? , I would have been able to do a more complete job.”
Utilizing resources
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Introductions
Don TaylorPresident, ACSI
Alex SiotosExperian
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Our public sector and municipal utilities are facing difficult times in revenue recoveries due to:
► Reduced budgets, the overall economy, technology and reduced staffs
The private sector faces some of the same business challenges
Our session today will focus on the Top-5business challenges facing the public sector and municipal utilities; these business challenges are based on survey results from this sector
► How do they compare to the private sector?
► What is the private sector doing to overcome them?
Business challenges
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#1 challenge
Difficulty finding the current location of the debtor
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Contact strategies
► Skip accounts
Resources
► Internal and external data sources
#1 challenge
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Check free state and local resources
► Drivers information
► Professional licensing
► Assessor
► Voter registration
Cost effective tools
► Electronic directory assistance
► U.S. mail – different formats
► Email and texting – permissions
# 1 challenge
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#2 challenge
Difficulty with prioritizing collection efforts
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Amount of time owed/age of debt
Dollars owed
All is equal
Score
Did not know
35%
25%
27%
7%
7%
# 2 challenge
How do you collect payments?
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Recovery scores
Credit attributes
Income
Assets
Age
Balance
Contactabilty
Previous history
Skip status
Account prioritization
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Account prioritizationRecovery scores
100%
80%
60%
40%
20%
0%
Cum
ulat
ive
% o
f dol
lars
col
lect
ed
Cumulative % of accounts5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95%100%
PriorityScoreSM Dollar PriorityScoreSM Incidence Retail RecoveryScoreSM Bankcard RecoveryScoreSM
Cumulative % of dollars collected
PriorityScoreSM Dollar score PriorityScoreSM Incidence scoreTop
percentileNumber of
records scoredCumulative payments
Top percentile
Number ofrecords scored
Cumulative payments
5% 147,925 $12,191,601 5% 148,171 $10,636,561
10% 147,982 $16,753,861 10% 150,994 $15,176,048
15% 147,865 $19,935,799 15% 147,111 $18,325,261
20% 147,969 $22,116,184 20% 150,621 $20,605,428
25% 148,083 $23,653,835 25% 146,121 $22,392,047
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Credit attributes15% performance lift overall by using Premier AttributesSM with a score
Based on previous client validations, not a guarantee of future performance. Results can change as applied to different portfolios and/or as additional client validations are performed and added to the overall results shown here.
100%
80%
60%
40%
20%
0%
Cum
ulat
ive
% o
f dol
lars
col
lect
ed
Cumulative % of accounts10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Cumulative % of dollars collected
27% lift
19% lift
15% lift
10% lift
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Cumulative
% of D
ollar
s Co
llected
Cumulative % of Accounts
Cumulative % of Dollars Collected
PriorityScoreSM Dollar + Premier AttributesSM
PriorityScoreSM Dollar
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Income InsightSM
Provides a comprehensive measurement of total income offering a complete financial picture of a borrower for greater insight into their ability to meet their obligations
Debt-to-Income InsightSM
An add on to Income InsightSM that returns debt-to-income ratio using debt obligations from credit report and Income InsightSM estimated income
Asset InsightSM
Gives a rank order estimation of a consumer’s deposit balances and assets enabling financial institutions to better understand their share of wallet
Account prioritizationIncome and asset models
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Demographic / account characteristics
Age – generally older debt yields lower recovery
Balance – direct human effort to larger balance debts, use mail, auto messaging for lower balance debts
Contactabilty – focus effort on accounts where contact information is readily available
Previous history – consider previous payment activity or known factors to assess ability to pay
Skip status – if an account is a skip with no contact information, consider minimal effort and outsourcing
Account prioritizationDemographics / account characteristics
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#3 challenge
Lack of data available
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Data resources
Best to use
#3 challenge
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Credit-based data
Experian Collection AdvantageSM
Demographic-based data
Use governmental resources – your state or county
Various online type data resources for contact information
#3 challenge
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#4 challenge
Difficulty of incorporating tools to improve debt recovery
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With limited IT resources and budgets, what are some of the easiest ways to incorporate tools
#4 challenge
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Online access to governmental resources – free
Online resources for skiptracing – free and fee-based
Professional license holds – if available in your state
Outsourced skiptracing
Letter services
Email and texting
Publicized amnesty programs
# 4 challenge
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#5 challenge
Difficulty in determining to outsource or continue to internally collect
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Do I outsource certain debt or do I keep trying to collect internally?
What metrics should I use to help answer this challenge?
#5 challenge
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Consideration 1 – available staff hours devoted to recovery effort
Consideration 2 – measure level of diminishing returns – scoring
Consideration 3 – cost of effort, labor, benefits, equipment, skiptrace, telephone
Consideration 4 – are there any tools that can be used internally not available to an outsourced vendor
Generally, the most cost effective strategy is to perform minimal efforts internally recovering the easiest accounts and outsource the older or skip accounts to third party agencies
# 5 challenge
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For additional information, please contact:Alex.Siotos@experian.com
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