Why I wrote this book

The Major Characters

Interesting Stats

 The Lingo of Debt Collectors:

Welcome to the world of debt collections, which has its own unique language. Here is a quick glimpse at the local dialect and vernacular. *Note: Some of these terms are specific to regions, businesses, and niches of the industry.

Bad Paper: Consumer debt that has been stolen, double-sold, already collected upon or is – for various reasons – no longer valuable or collectible.

Basis Point (bip): One-hundredth of a penny. If a debt buyer pays 5 bips for a $10 million portfolio of debt, he or she would be paying $5,000.

Beaten Up Paper: This is typically paper that has been bought, sold, and collected upon by many different agencies. For this reason, it tends to be cheap and difficult to collect on.

Blaster: This is the automated system at a collection agency that leaves recorded messages on debtors’ voice-mails and answering machines. The blaster does not route calls to collectors; it simply leaves message.

Bouncer: A debtor who wrote a check that bounced.

Calls Per Hour: This is a metric that helps managers measure how productive a collector is. Generally, if a collector is making 15 or 16 calls in an hour, that is satisfactory. A highly motivated caller might makeover 20 calls in an hour.

Charge Off Date­: This is a term used to describe the moment when a bank or creditor deems an account no longer an asset, writing it off as unlikely to be collected. This typically occurs 180 days after the last payment.

Close Out: These are the last few days of the month when collectors are under pressure to reach their monthly goals.

Dialer: This is the automated system at a collection agency that calls a debtor, gets him or her on the line, and then immediately transfers the call to a collector.

Dial Out: This is act of actually calling debtors by phone. A manager may exhort his collectors: Stop wasting time and dial out!

Doc: This is the act of writing notes about a given account, such as notations on when a debtor was reached and what he or she said. A collector might say: I just spoke with that debtor, I am going to doc it. This is also a noun describing paperwork accompanying an account when it is purchased. A purchaser of accounts might say: I am excited about the file of accounts that I purchased, because it comes with docs including debtor information. This will make our job easier.

Double-Sold: This a term used to describe a bundle of consumer debt that a debt broker or debt buyer has sold simultaneously – and often deceitfully – to two or more buyers at the same time.

Drops: These are regularly scheduled events where management provides or drops newly-acquired accounts into the hands of collectors at an agency. A collection agency may schedule one drop on the first of the month, another on the tenth, and a third on the twentieth. Typically, an agency will assess the performance of each drop. A manager might observe: My collectors really did well on the December 10th drop.

Dummy Doc: This reflects a number of activities that a collector may engage in to obscure the true collection record. This includes creating false notes in a debtor’s file, which might enable a collector to lay claim to an account and render it protected. On a given day, for example, a manager might turn on the auto dialer and allow collectors to collect whatever comes their way. A collector might then see a hot account – one that is likely to pay – but fail to make contact with a debtor. Typically, a collector can only claim account (and protect it) when he actually gets the debtor on the phone. In this case, a collector might dummy doc the account and claim – falsely – that he made contact, thus claiming it and protecting it. This term might also refer to a collector who puts notes into accounts he did not work with requisite diligence, overstating his effective daily production.

Fresh Paper­: A bundle of consumer debt often purchased directly from a bank or creditor. Such paper is usually highly prized: “This is fresh paper straight from Bank of America, so it is ripe for the picking.”

Front Line & Back Line: This is a distinction made at some collection agencies, dividing collectors into two categories or classes. The top collectors at such an agency belong to the front line. Collectors in this group get the first crack at collecting on the best accounts. At some point, typically in the middle on the month, any accounts that were not collected get sent from the front line to the back line. In short, the back line collectors get the leftovers or remainders. Those in the back line tend to be newbies and underperformers. They have to earn and prove their right to enter the front line. In addition, statistical analysis is oftentimes used to assess what accounts should begin in the front line versus the back line based on the likelihood of collection.

Heavy Hitter: This is a collector who is the top dog at the office. At an office of with 150 collectors, there might be ten heavy hitters. Such collectors can occasionally get away with a more lax schedule, showing up late and leaving early. A heavy hitter typically knows his or her worth.

Hoppers: Collectors who are notorious for suddenly leaving one agency only to begin working at a new agency shortly thereafter.

Hot Account: This is an account that is likely to pay. Hot accounts are distinguished primarily by the creditworthiness and responsiveness of the debtor. Such accounts are the low hanging fruit and are coveted by collectors.

Marrying the Debtor: This is technique where a collector tries to ingratiate himself to a debtor, establish or rapport, or otherwise earn enough trust so that the debtor ends up paying his or her bill. This term can also be used in a deprecatory manner by others when a collector has pinned misguided hopes that an account that might pay. A colleague might say; “John married that debtor, and she still isn’t paying.”

Meat on the Bone: This a phrase used to describe a bundle of debt where there are plenty of hot accounts that are readily collectible.

Out of Stat Paper: This is older debt where the statute of limitations has expired and the debtors are no longer legally liable to pay it.

Paper­­: A bundle of consumer debt that is typically bought and sold in the form of spreadsheets, often for pennies on the dollar.

Post Dates: If a debtor cannot pay his or her debt in one lump sum, he or she may create a payment plan and agree to pay a certain amount each month. These planned future payments are called post dates. A collector often relies on post dates to help sustain him during the dry months when, for whatever reason, it is proving hard to collect. For example, in December – when consumers are typically spending their money on holiday gifts – it is often crucial for a collector to have many post dates lined up. Some agencies rely on post-dates as a way to develop a predictable flow of revenue, as opposed to agencies that rely on “one-time” settlements. The former are referred to as “post-date shops.”

Protected Account: This is an account that a specific collector has identified and staked out as his own. Typically, in order to protect an account, a collector must make phone contact with a debtor and begin a dialogue. That collector can then claim the account is protect and he may have until the end of the month to collect on it. Protected accounts are, by their nature, expected to be exempt from being shuffled. However, shuffling of protected accounts is a common source of discord in collection agencies, regardless of reason.

Psychological Pause: This is calculated break in the phone conversation, when a collector puts a debtor on hold—ostensibly to consult with a manager or supervisor. A collector might, for example, suggest to a consumer that he can reduce the amount of a debt, but first must consult with his superior. At this point, the collector would take a psychological pause, place the debtor on hold, and then sit back and relax for a minute or two. The goal is to make the debtor sweat it out. Then the collector picks up the phone and offers the debtor a deal.

Refusal: From a collector’s perspective, this is perhaps the worst kind of debtor—namely, one who refuses flatly to pay.

Rolling a Check: This is a complicated maneuver that collectors will try in order to pad their totals for a month, enabling them to reach their goals or receive a bonus. For example, a collector may be nearing the end of the month and be $5,000 short of hitting his or her goal, triggering a bonus. However, a debtor may have agreed to pay $5,000 on the 10th of the following month. In order to roll a check, a collector might enter false information into the system – for a bogus $5,000 check – that is dated for a date before the end of the month, perhaps the 31st. That check, of course, does not go through. Yet that collector often has as much as two weeks to sort the matter out and collect the $5,000. So, on the tenth of the following month, the collectors processes the legitimate $5,000 check and collects the money. That money counts toward the previous month’s totals and thus, by rolling the check, the collector has managed to hit his goal and earn a bonus.

The Shake: A very aggressive kind of talk-off, in which the collector falsely identifies him or herself as a process server who is en route to deliver court summons papers to the debtor’s house. Feeling immediately threatened, the debtor is more likely to pay. This technique is, of course, illegal and is favored by rogue agencies that tend to work Payday loans.

Shuffle: In the same way that card players shuffle a deck of cards, so that a player doesn’t get stuck with the same cards repeatedly, managers will shuffle accounts so that the same collectors don’t continue calling the same debtors. The thinking is that, if a collector is failing to collect from a give debtor, it may work better to switch things up and swap in a new collector who will establish a better rapport and succeed at “marrying” that debtor. Agencies also use shuffling as a psychological tool with collectors, recognizing that shuffling accounts between collectors gives even old accounts a veneer of “newness” to the collector that has never seen them before, thus increasing morale. A collection agency might shuffle accounts once or twice in a give month. Front Line accounts and Back Line accounts are shuffled separately.

Six and Out: Some states require that employers have their employees take a lunch break after a set number of hours. In New York State, for example, an employee must take a break after six hours. Instead of taking a break, some collectors just put in a six-hour day. This is called six and out.

Skip Trace: This is the process by which debtors search all available databases to find out information on the whereabouts and contact information for a debtor. In addition to querying databases, this also refers to more old-fashioned methods, such as calling known relatives and associates.

Talk-Off: This is monologue, spiel, or routine that collectors say over the phone in order to coax a debtor into paying his or her bill.

Tax Return Season: This time period, spanning from January to early May, is the most lucrative time to collect on debts, because consumers tend to have a extra money in their savings accounts.

Why I wrote this book
The Major Characters
Interesting Stats
The Lingo of Debt Collectors