RALEIGH, N.C. — Given a choice, every lender would prefer to keep the debtor in the vehicle. Once an asset goes out for repossession, the outcome is usually a loss that must be charged off. Even in today's booming used-car market and with the higher asset valuations lenders are experiencing at auction, the likelihood that a lender will recoup sufficient funds to cover the outstanding balance and all of the collection fees from the disposition of the asset at auction is unlikely.

But most debtors find themselves stuck without a plan for resolution, and after being bombarded with auto-dialers, collection notices and repeated request to bring an account current, the debtor becomes lost. Knowing he cannot muster up the necessary funds to pay current, the debtor stops responding to the lenders attempts to collect. Stuck somewhere between denial and the belief that one more day will make the difference, the person withdraws waiting for the magic bullet that will save the day, or that given enough time their problem will just go away.

Without a work out plan, the options become clear, repossess the unit and recover as much as possible, minimizing the charge off amount. Then deal with trying to collect the deficiency balance.

Another approach leverages a field service call in an attempt to get the debtor talking, hopefully finding a resolution other than repossession. Field services, or otherwise called "door knocks" can start the communication flowing again between a non-respondent debtor and the collector. Knowing the debtor is avoiding the phone and ignoring letters, the field agent visits a debtor's residence or place of work. Ideally contact is made and the debtor is put in touch with the lender. Field services can be used by the lender to mitigate the need for repossession altogether. When properly executed a field service call can be invaluable creating a win/win, both for the debtor and the lender.

The problem is that the field service is often not integrated into the lenders collection or repossession processes. Usually, the lender must login to a separate system outside of their collection environment to initiate an assignment. 

Like the days of old, the assignment would fall into a black hole and mysteriously a field report might show up a few days later but the connection to the collector may have been severed as a result, creating a lost opportunity whereby critical data and communication did not resolve the delinquency in time.

Like any service or tool, ready access promotes usage. By integrating field services into the "bag of tools" available to the collection team, it can be leveraged at the appropriate point in the collection recovery process.

At Consolidated Asset Recovery Systems we found that when we integrated the field service into the desktop of the collector, field services became more effective. Collectors had complete visibility from the original collection efforts to the field chase through to recovery. The case histories along with the field notes were effective in making key decisions. By being well-informed, the need for repossession was reduced. And when a repossession was required, the quality of the data shared with the repossession agent improved the recovery rate. 

Another side benefit was that actual field service assignments actually went down in some cases. Now that the collectors could see all activity and field notes were routed back to the correct collector for each case, duplicate orders no longer occurred.

Once Field services are integrated into the collection and recovery processes, other uses can be identified. One example is leveraging field service to validate asset condition prior to repossession (Field Inspection). Understanding the value and condition of an asset prior to repossession may avoid unnecessary fees and costs being added to a loss that will ultimately be charged off. Similarly, verifying the condition of a vehicle in impound prior to paying expensive bailment fees can be an effective use of field services inspection.

Consolidated Asset Recovery Systems pushes as much information as possible up from the field and as early as possible into the decision tree so that critical decisions can be made. For instance, this can help in deciding when is the best time to send an account out for repossession, or when should I engage a field service? Consolidation of all collection data related to an assignment, along with transparency throughout the collection and recovery process, is the key to controlling costs and reducing losses. 

Field services is another tool in the collectors bag when properly integrated and is not locked outside the recovery process in a proprietary application.

Through a single Web portal, the collector can analyze case history, evaluate actions they can take to correct a delinquency and then select the appropriate service, all without leaving a single view screen. All field communications, status and activity are tracked in real time. Single click reports determine the effectiveness of each decision and map trends to help in selecting future actions. At their fingertips are many of the services they use every day such as repossession, remarketing, legal, field services and skip services. Information for each service can be consolidated into a single historical record for a single asset with all communications captured into the case history for review.

These integrated services simplify the collection and recovery process and free up valuable time for collectors allowing them to focus on keeping accounts current and debtors in their vehicles.

Steve Norwood is the president and chief executive officer of Consolidated Asset Recovery Systems. Terry Groves is the senior vice president of sales and marketing for the company.