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The next time you speak to a debt collector, you might find yourself negotiating with a computer. And you might actually prefer that.

Consumers buy toothpaste and bread without talking to a person. They get boarding passes for flights with a few swipes of a credit card or mobile phone. Why not pay off debt with a click or a text? After all, many consumers expect self-service now, and would rather perform these kinds of transactions without ever interacting with another human being.

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    Digital debt collection promises to help you avoid the discomfort of discussing your finances with another person, and the attached perceived judgment. With that obstacle removed, you’re free to take back control of your financial future. As you begin the journey to improving your finances and credit health, make sure you have a financial plan in place so you can manage your outstanding obligations and improve your credit, while paying off your debt.

    In the paragraphs below, we’ll explore the digital debt recovery process, prepare you to take full advantage of its benefits, and give you tips to improving your credit score through smart credit card use. For help with making a wise choice in your next credit card application, find out more about Top Cards for Bad Credit at Credit.com.

    Debt Collection Is Going Digital

    In April 2017, Experian announced a self-service platform named eResolve, which will let consumers negotiate and resolve past-due obligations without ever talking to a debt collector.

    “The eResolve platform negotiates with the consumer on the client’s behalf and direction to resolve their obligation in a frictionless environment,” Paul DeSaulniers, senior director for risk scoring and trended data solutions at Experian, said in an email. “eResolve is providing a way for the consumer to interact on their terms, at any time of the day or night using a digital channel that is more preferred over the traditional phone call and avoids aggressive collection tactics.”

    A firm named TrueAccord attracted a lot of attention in 2014 promising to create a similar digital debt collection platform. CEO Ohad Samet says that since then, TrueAccord has generated plenty of success stories. He claims more than 60 clients with 1.4 million consumers are “on the platform.” There have been “hundreds of thousands” of resolutions — including consumers who could easily click and tell the firm they’d been victims of ID theft, or had filed bankruptcy, so collections efforts should stop.

    By taking to cyberspace, digital debt recovery also seems to be going global. The service is winning fans and users world-over, as Germany’s CollectAI and Pair Finance, Australia’s InDebted, and Canada’s Symend have all jumped in the fray to take advantage of seemingly underserved consumers.

    The common theme among all providers, in the U.S. and abroad, is the focus on treating the debt consumer as a customer. Even when pitching digital debt collection programs to creditors, the services prioritize customer retention through softer messaging and a customer service approach:

    • CollectAI—“A customer worth serving is a customer worth keeping!”
    • Symend—“Improve customer retention.”
    • TrueAccord—“Consumers remain highly motivated to pay off their debt and reach financial health. You gain loyalty while reducing potential losses.”
    • InDebted—“Provide exceptional customer experiences by meeting modern client needs throughout the collections process.“
    • eResolve—“Communicate with your customers in a cost-effective, less threatening way.”

    Pros and Cons of Digital Debt Collection for Consumers


    • Avoid aggressive or illegal debt collection methods by over-eager collection agents
    • Choose the right time for you to engage in debt negotiations
    • Review all offers to manage payments, including available financing options and settlement options
    • You, the consumer, drive the process


    • Digital communication with settlement offers may not reach you (email filters, spam filters, etc.)
    • Ability to negotiate terms limited to preselected offers
    • You can’t explain extenuating circumstances to a computer

    Repairing Your Credit After Collections

    As you probably know, having a debt go to collection adversely affects your credit score. Paying off the debt can help your score recover. But, there’s likely more that you would need to do to repair your credit.

    After a negative credit event, such as an account going to collection, you want to re-establish creditworthy behavior. You can demonstrate good credit habits by opening and maintaining a secured or a low-limit unsecured credit card. There are several good credit card offers designed to help people rebuild their credit.

    You don’t just want to get a new credit card, however. You have to show that you can use it responsibly. Keep the balance on your new card low and pay off all charges in full each billing cycle. According to the credit monitoring company Experian, you should keep your credit utilization rate below 30%. That means, if you have a $100 credit limit, you should not charge more than $30 to the card without first paying off some of the balance.

    For help evaluating which credit card to apply for, take a look at the guides Credit.com has assembled for people with fair or bad credit, who are looking to rebuild their creditworthiness.

    Adios, Debt Collector Misbehavior?

    It’s easy to see the potential advantages of digital collections. For starters, the obvious: Misbehaving debt collectors top most lists of consumer gripes, so getting rid of the “human element” can get rid of the illegal threats. After all, computers don’t get frustrated.

    “Debt collection is a powder keg. There are explosive situations,” Samet said. “A computer doesn’t get tilted (frustrated). You can’t yell at computers and scare them.”

    The old-fashioned method of debt collection resembles telemarketing, and when done badly, adds a layer of badgering that can violate the Fair Debt Collections Practices Act. While more phone calls don’t mean higher collection rates, they do mean greater risk for harassment allegations. Both Experian and TrueAccord claim their technologies work to optimize the timing and method of communication with customers to get the best results.

    “Consumers desire a more seamless and convenient way to resolve their debts, without what is often felt as an uncomfortable exchange,” DeSaulniers said. “The process is about making the experience less threatening for consumers and gives them the flexibility to access their account at any time. Doing so increases the consistency and efficiency of the debt collection process.”

    ACA International, a trade association that represents collection agencies, did not immediately respond to request for comment for this article.

    Know Your Rights

    The Fair Debt Collections Practices Act provides consumers with a number of protections. As you consider your options for retiring your debt, there are a few important things to you should keep in mind. When evaluating debt collection offers, remember the following:

    • Debt collectors can’t add fees, interest, expenses, or other charges to the original debt.
    • Information about your debt cannot be made public.
    • Collection agencies may not threaten you with any action they do not intend to pursue (such as suing you for the debt).
    • You can’t be arrested for non-payment of a debt.

    Negotiations Are Straightforward

    Negotiating debt with a computer is exactly what it sounds like.

    “First, the lender or collection agency contacts the consumer to remind him of his debt owed. At the same time, a website link is provided to the consumer, who can negotiate the payment of his debt without human interaction,” DeSaulniers said, describing the process. “Next, the consumer logs on to the website to submit a reference number associated with their account and then explores repayment options. Here, the consumer may negotiate payment amounts, terms, and dates within parameters set by the lender.”

    For example: Debtors get an email with an offer such as making three payments with 0% interest, or 90-cents-on-the-dollar if paid in full. Depending on what lenders say they’ll accept, a consumer who turns down that offer might get a subsequent pitch for an 80-cents-on-the-dollar settlement.

    Samet says machine-based debt collection solves several problems. Chief among them: thorny regulatory issues. Computers don’t call or text at the wrong times. They don’t use forbidden language, such as threat of law enforcement.

    “Because of our machine-based approach, almost every line of text we send (to consumers) is prewritten and preapproved. It’s much easier for us to be compliant,” he said. He claims TrueAccord gets 66 times fewer complaints than traditional collection agencies (the sample size is still small).

    Digital debt collection also fits into modern consumer behavior, Samet said. More than 60% of the interactions his firm has with debtors happen after hours, when it would be illegal to call.

    “It’s people at 2 a.m., on their mobile phone, looking at their options,” he said.

    Collection Efforts Tailored to Your Behaviors

    But there’s more going on than just staying on the right side of the law. TrueAccord’s computers watch consumer behavior and learn when best to ping them for a resolution. If someone has spent several nights clicking through settlement options, perhaps that’s a good time to send a text, or even make a better settlement offer.

    “People are different. Some need encouragement. Some need inspiration. Some need to be pointed to the facts,” he said. “We reach out in the right channel at the right time in the right language.”

    Some of that language is funny — one note tells a debtor that a bill feels neglected and is “listening to breakup songs and eating ice cream” because it is unpaid. Per one consumer’s report, however, some were more sanctimonious, or even menacing.

    “[It] feels like you’re taking advantage of [the debtor], and they’re kind of right,” says a consumer who posted a note quoting a TrueAccord email. “Let’s just take care of this balance now and be done with it. It’s not like we’re going to give up.”

    When asked about the complaint, Samet said that if the cited email was really from TrueAccord, it was probably “very old and long decommissioned.”

    “It did take us a while to find the right type of honest and clear communication that consumers respond well to,” he said. “And, of course, we have unfortunately seen cases where consumers confused us with other agencies.”

    Dealing with Robot Debt Collectors

    Of course, even robot debt collectors have to obey federal law. Send a cease-and-desist letter, and the emails and texts must stop.

    But digital debt collection might have a secret weapon: embarrassment—or rather, the lack of it.

    “Consumers feel less judged,” Samet said. “Consumers in debt are afraid and overwhelmed. We speak to them in a tone they appreciate … we give them more flexible choices, so they feel like they aren’t being harassed.”

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