Written by Chris Stanley, Director of Business Development
As we continue to venture through uncharted waters, I recently reflected on how households have changed dramatically, and consequently, how I have now added the title of “Educator” to my resume. I continuously worked with my wife to manage the distanced learning schedule and workload for our three children, so we could effectively tackle our days as working parents.
I have been working in the estates business for the entirety of my career, and the changes we are enduring today require thoughtful strategies to ensure a positive outcome in the future. I have come to realize that the complexities of life are not so different than the complexities we work to solve in our professional lives.
This article speaks directly to the auto industry and how auto lenders can devise frictionless and flexible strategies to successfully navigate the changing industry terrain.
The challenge - driving change
Auto portfolios experience complexities and process dependencies which cannot be solved with simple adjustments. These processes require alignment that permeates throughout multiple departments to maximize recoveries, and ultimately provide the best survivor experience.
As the industry leader in auto estate recoveries, we know firsthand how to overcome obstacles which affect process continuity. With more than 20 years of experience implementing robust procedures that provide an exceptional survivor experience, DCM Services (DCMS) has pioneered an approach consisting of a full review and understanding of the lifecycle of an estate account. Partnering with DCMS provides your team with a foundation of knowledge and understanding of critical processes to evaluate, so you can create a successful auto estate recovery strategy.
Below are a few key best practices we have identified through our partnerships with leading auto lenders and financial institutions.
Estate recovery process best practices
Timely identification
The first part of the process is identifying deceased customers. Doing so quickly and efficiently is paramount. This segment of inventory is time-sensitive for auto lenders and estate recovery partners alike. A multi-faceted approach, which includes a robust date of death scrub and internal resources to handle notification of a customer’s passing, is critical to the overall success in resolving the account.
In the past, it was common for auto lenders, or all lenders and creditors, to look past an account if it remained current. There are many benefits to proactively understanding if a customer has unfortunately passed, including mitigation of fraudulent activity on an account, and ensuring the proper treatment if the account does become delinquent. Specific to estate recovery, probate claim filing is time sensitive and failure to actively identify deceased accounts can result in enormous loss on the back end. This occurs when front end processes are not efficiently implemented and executed.
Process transparency
A transparent and streamlined process adds value throughout your organization. Aligning independent processes and departments is critical for all stakeholders involved in order to have clear line-of-sight throughout the estate account life-cycle.
For instance, do your department leaders in Customer Service, Pre-Charge Off Recovery, Charge-Off Recovery, Repossession, and Agency Management all know how their process impacts the customer experience and the recovery of estate accounts? When these stakeholders understand how they impact the end-to-end process, it creates a clear-cut and frictionless long-term strategy. In addition, it adds to the surviving family members’ experience in working with your organization and promotes a positive experience with your brand.
Important considerations
There are many aspects to evaluating your estate recovery processes. Below are important questions to provide clarity for internal departments, as well as guide survivors through the estate recovery cycle.
When the Customer Service department is notified of a customer’s passing, do they gather informant contact information?
DCMS defines informant information as the contact information for the person who communicates the passing of the primary customer on a loan to the lending organization. The most relevant pieces of informant information are:
Name
Address
Phone number
Email address
Making use of these data points provides a substantial uptick in legitimate contact and recovery rates, while reducing complaints for your organization and any outsource partners’ organizations.
Whether you partner with a vendor or maintain an internal recovery unit, there is value in recording informant information.
We often find that auto lenders do their best to manage recoveries with an internal team. These internal teams garner recoveries but often do not consider the remaining steps in the process for filing probate claims or outsourcing to a partner. The linking of informant information captured at the time of deceased notification has lasting effects throughout the entire estate account life-cycle.
Do accounts get properly flagged as deceased so traditional collection calls are not made to a grieving family member?
Each lender should have a specific flag for deceased accounts to ensure they receive an empathic, survivor-sensitive approach, and are routed through the correct process. Because delinquency does not typically drive the estate account flow compared to the normal collection process, it is very important to have a strategy which treats survivors in a manner that more closely aligns with customer service. Nearly 70% of accounts in the financial services industry are paying customers at the time of passing. These are not traditional delinquent accounts and should be treated with a specialized approach.
Are you filing probated estate claims on secured inventory to increase voluntary surrenders?
Filing probated estate claims on secured inventory will expedite the voluntary surrender of secured collateral and involve estate attorneys earlier in the process, making it a business-to-business interaction. In certain circumstances, the estate attorney will promote and assist in the surrender of the collateral to avoid having a secured probated estate claim against the estate. While filing a probated estate claim may take time to pay out, the benefits of filing a probate claim can be realized immediately and provide additional protection for recoveries on deficiency balances after secured collateral is recovered.
Common Questions
When working with clients and prospects, the focus is creating a transparent and streamlined end-to-end recovery process. The most common questions received revolve around the following:
When should we begin scrubbing accounts for open estates?
The answer is as soon as possible. Estate accounts are a time sensitive segment of inventory, and early identification is critical to non-probated estate recoveries. Identifying accounts with a probated estate claim is critical, and these accounts do not need to be outsourced to accomplish this enhancement.
Do we have to wait for a deficiency balance to file a probate claim?
While this seems like a natural step in the progression, filing probated estate claims while an account is secured is a tremendous efficiency gain. A probated estate claim on an account with secured collateral could increase liquidations, provide additional voluntary surrenders, and minimize complaints throughout duration of the process.
The anchor of a successful estate recovery strategy
A successful estate recovery strategy is anchored by a partner with the expertise and experience to execute the most critical step in the process.
The identification of probated estates requires searching 3,200+ counties and 3,450+ specific courts. Internal collections teams are often overwhelmed because the identification process and accessibility varies greatly from county to county. A majority of searches require costly, time-intensive methods such as telephone calls, written correspondence, and court required fees to search one single name. Many courts impose unique barriers, such as file limit restrictions, limited access times, volume caps depending on court staffing resources, and more. Other vendors utilizing manual claim filing methods often result in mismatches or false positives, sometimes missing open estates altogether.
Having a partner to assist in probated estate identification and claim filing or handling your full portfolio of deceased accounts solidifies the comprehensive end-to-end process of an estate account. It shifts the communication from discussions with family members and other survivors, to a business discussion between your partner and an estate attorney handling the probated estate. In instances where there is a probated estate, we find an estate attorney representing the estate approximately 70% of the time.
Leveraging our industry-leading probated estate database, combined with our empathic and survivor-centric processes, DCMS drives higher performance at every stage in the recoveries process.
Ready to create an industry-leading estate recovery strategy? Reach out to learn how partnering with DCMS optimizes recoveries, creates an exceptional survivor experience, and ensures the loyalty of future customers.