Problem Statement

More than half of US consumers feel under pressure when collectors call them. Unfortunately, collecting debts through calls is a primary method of most lenders, though it proves itself no longer efficient. Consumers simply start ignoring such calls, and lenders rest with the unpaid debt. Also, digital channels are more preferable among “tech-savvy” Millennials and Gen Z’s due to their speed and robustness.

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We were worried that consumers would be concerned with an obligation to pay overtime instead of paying in full but in fact, it proved not to be the case. Similarly, our concern that email opt-in may be an issue proved to be wrong.

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Things change when a digital-first lending solution by Paydoff comes into play. Lending 2.0 is the name of the game here, so Hunter Warfield chose us to overcome its operational and compliance issues.

After researching the client’s market environment, we defined the following goals to reach:

• Increase debt recovery from the total volume of unpaid debt;
• Reduce the duration of the debt collection process itself;
• Minimize debt collection costs;
• Help to continuously demonstrate compliance;
• Provide top-shelf user experience to consumers.

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Our solution

Paydoff removes the persistent pain points between borrowers and collectors by setting up a universal platform for collection agencies. This way, a consumer may access the platform from any device to revise their debt and consider available payment options. Using self-training Machine Learning models, Paydoff calculates individual payment plans based on the real-time negotiation results and what the consumer can afford. For lenders, Paydoff offers a flexible framework that they can adjust to their firms’ internal rules and local regulations and further improve the consumer’s experience with billing, payment scheduling, reporting, and other options adjusted to each particular consumer. If needed, consumers may renegotiate payments for lower settlements.

Finally, Paydoff guarantees compliance through limitation of potential violations via human collectors. Unlike a human debt collector, the system never tricks or lies to the consumer or promises something. The built-in PCI compliance ensures better security and less possibility of violations.

Client benefits

Over two years of close cooperation with Paydoff, Hunter managed to digitize its consumer lending, with debt resolution and payment negotiation all performed online, stress-free for both parties. Additionally, Hunter’s collectors benefitted from fast-track compliance validation; Paydoff had compliance requirements already embedded, so they didn’t have to deal with lengthy disclosures when contacting borrowers.

Finally, Paydoff delivered a fully automated client account so that lenders could delegate the typical client issues to the system while focusing on more complex tasks. To evaluate their performance, lenders can use a set of pre-built reports or request adding custom ones to cover additional aspects.

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Web portal 24/7 availability is a great addition to our process and offering a self-service debt settlement option gives the consumer a feeling of control of the situation. This means less stress for both.

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Hunter Business Results

Besides the aforementioned key points, Paydoff opened several strategic benefits to Hunter, primarily introducing new communication means with consumers. Next, it facilitated the whole collection process for lenders towards increased transparency and compliance. What’s more important, it made collections more cost-effective: collectors paid only for collected debts without any additional fees.

Milestones Reached

• In the last three months working with Paydoff, Hunter Warfield collected 7,500+ payments;
• Around 30% of Hunter’s clients admitted that they settled their debts faster online than with the previous “phone-call” collection method;
• In total, Hunter managed to increase the volume of collected debt per month by almost 600%, which brought the firm over $53 million of additional revenue (or 75,679 successful payments).

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