Maximizing Revenue Recovery for Public Sector and ... revenue recovery for public-sector and...

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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)


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


Introductions

Don TaylorPresident, ACSI

Alex SiotosExperian


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


#1 challenge

Difficulty finding the current location of the debtor


Contact strategies

► Skip accounts

Resources

► Internal and external data sources

#1 challenge


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


#2 challenge

Difficulty with prioritizing collection efforts


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?


Recovery scores

Credit attributes

Income

Assets

Age

Balance

Contactabilty

Previous history

Skip status

Account prioritization


Account prioritizationRecovery scores

100%

80%

60%

40%

20%

0%

Cum

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% o

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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


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%

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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


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


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


#3 challenge

Lack of data available


Data resources

Best to use

#3 challenge


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


#4 challenge

Difficulty of incorporating tools to improve debt recovery


With limited IT resources and budgets, what are some of the easiest ways to incorporate tools

#4 challenge


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


#5 challenge

Difficulty in determining to outsource or continue to internally collect


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


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


Q&A


For additional information, please contact:[email protected]

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