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    5 Delinquent Borrower Objections (and How to Overcome Them)

    When it comes to paying bills, some people have a million excuses (both valid and invalid) for skirting their obligations. Unfortunately, lenders constantly deal with borrowers' excuses when it comes time to pay up. Here's some guidance for responding to common collections objections and recouping the money you're rightfully owed.

    1. "I don't know what you're talking about."

    Claiming a debt doesn't exist is a common response to a collections call, and it could be that the borrower truly does not recall the debt. Refresh the borrower's memory by offering a detailed account of exactly what the loan was used for when the money was borrowed, and what dates any payments were made or missed. Remind the borrower that his or her signature appears on the loan documents.

    2. "My parents were supposed to pay that loan."

    Young adults often don't understand that financial adulthood begins at age 18. They are responsible for loans in their name, even if their parents had agreed to pay in their place. Here's how to structure this conversation:

    • Begin by explaining that anybody age 18 and over is held responsible for bills and loans.

    • After the borrower understands the legal responsibility, suggest a solution involving the parents: "Since you're an adult, I need your permission to discuss this loan with your parents. Do I have your permission to contact them and ask them for payment?"

    • Secure contact information for one or both parents.

    • Explain to the borrower that you will attempt to collect payment from the parents; if you are unable, you will call back to collect from the borrower.

    3. "I don't have time to discuss this right now."

    An outstanding balance is not something that gets better with age. Explain to "Busy Borrower" that you won't take long. Quickly state the necessary details of the loan and ask for payment. If a Busy Borrower still says he or she can't talk, remind him or her that it will actually save time to settle the balance now because that will satisfy the debt and eliminate future bothersome calls.

    4. "I just lost my job and can't possibly pay you now."

    This one's tough, and we all understand. Here's a sympathetic response that produces results:

    • Express that you're sorry to hear of the borrower's troubles; unfortunately, plenty of people find themselves in this predicament.

    • Tell the borrower that since your institution understands this issue well, you work with borrowers to find a good compromise.

    • Depending on the outstanding balance, propose a reasonable amount for the borrower to pay today and a payment plan to pay off the rest.

    • Once you have an agreement on some payment today and a plan for the future, tell the borrower you will call again in 90 days to review the plan, with the hope that the borrower will be established in a new job by then

    5. "I'm not paying that bill because I'm unhappy with the service I've received."

    Ouch! We never want to hear this sort of thing, but unfortunately, it's likely we will at some point. Here's a good response:

    • Begin by saying you're very sorry to hear that your institution's service was not up to its normal standards.

    • Ask if the member notified anybody of the trouble at the time, so you can check into the issue and ensure it's addressed.

    • Explain that since member satisfaction is extremely important, your institution would appreciate the member sending a detailed account of the problem. Provide the appropriate contact information for that report.

    • Change the subject to the matter at hand (the outstanding balance) by saying something like, "Thank you for helping us improve our service. However, right now we still need to settle your account, because the obligation still exists. How would you like to pay the balance today?"

    • Assure the member that your institution will look into the complaint and take appropriate measures to ensure the problem does not recur.

    While collections will always be a necessity for lenders, we can cut the time we spend contacting borrowers if we're more efficient when dealing with objections and excuses.

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