All lending institutions must have a plan or a department involved with the collection of payments from delinquent loans and defaults of debt. The consumer loan collector is expected to abide by the policies and procedures determined by the company for the suitable collection of a loan. The job requires contacting customers who are delinquent in their loans, obtain payments, establish commitment agreements, or arrange a repayment plan. The consumer loan collector relies on a pre-established guideline and instructions and works under direct supervision.
Because of the sensitive nature of the job, the consumer loan collector must have a friendly attitude and voice. Abusive language, threats, and harassment by a consumer loan collector can result in a lawsuit. The Federal Trade Commission enforces the Fair Debt Collections Act, which prohibits loan collectors from using abusive, unfair or deceptive practices to collect on consumer debt. This debt includes money owed for personal credit cards, auto loans, medical bills, or mortgages.
Knowledge of Finance
A consumer loan collector should be knowledgeable about all laws relating to the collection of consumer debt and the restrictions placed on the efforts to solicit payment. Each collector must send a written validation notice five days after contacting a delinquent borrower stating the name of the creditor and how the borrower will proceed if he or she does not feel capable of covering the debt.
The job requires a high school diploma or its equivalent. It can be considered a beginning career for undergraduates seeking positions within the banking industry. A substantial number of consumer loan collectors have associate’s degrees or better. The job gives them familiarity with banking procedures and helps them develop their problem solving skills.
It takes two to four weeks of professional training to work within the company’s desired job capacity. Employees seek candidates who are self motivated, have good problem solving skills, demonstrate good communication skills and pass a background check.
As they become more knowledgeable in their job capacity, they may be encouraged to negotiate payments outside the standard guidelines, authorize credit bureau deletions, and negotiate payment plans that extend over a longer period of time than the standard. They may advise management regarding effective collection strategies for various portfolios.
Consumer loan collectors must have good computer skills and knowledge of various software programs. They must exhibit a solid background in basic math skills, such as addition, subtraction, division, multiplication, and percentages.
Consumer loan collectors generally work in an office, has contact with other departments and their employees, and has regularly scheduled hours. They make and receive phone calls on a regular basis, type on a standard keyboard, read and comprehend information from a computer terminal, as well as written resources. Their average pay is approximately $30,000 a year.
This is a job that does not require a lot of schools and yet one that will give you the vital experience in a banking environment that you need to move upwards within the company. Ask UMD about opportunities in management and other lending positions.