Hi Everyone,

It’s Hector and as always, I greatly appreciate receiving many wonderful emails from readers asking for my thoughts and guidance.

Last month I received a rather concerning email from one in-house collection manager, I’ll call Joe, who was confronted with a slanderous accusation. Let me explain.

Joe works for a tool and die manufacturer and has been performing both credit risk management and collection activities for fifteen years. According to his email, Joe knows that his collection style is a little more straightforward than that of most other people, but at no time has he ever raised his voice or used unprofessional language.

One customer however has become more difficult than usual. Not because they have been habitually 60 days past due, but because the new accounts payable manager has been confrontational when Joe inquired as to when their payment will be forthcoming.

The last time Joe called, which was the third time for the same past due invoices, the A/P manager really became quite annoyed and told Joe that he had no right to keep calling her about their past due payment. When Joe heard her response, he was taken aback. He told her he has every right to call and that he didn’t appreciate her tone of voice. The A/P manager abruptly hung up.

Subsequently, Joe spoke with his CFO, and it was decided to hold any open orders and to send the account to their third-party collection provider.

A couple of days after the call, the CFO received an email from the A/P manager that had a voice recording attached. The recording was the conversation between Joe and the A/P manager in which the A/P manager had used AI to completely modify their conversation. In other words, unbeknownst to Joe, the A/P manager apparently recorded their conversation and then used AI to create a new conversation that sounded perfectly like Joe’s voice but contained threats and other rough language.  

Upon listening to the recording, the CFO called Joe into his office to listen to the conversation. When Joe heard it, he was completely shocked and told his CFO that absolutely nothing like that conversation ever took place.

Knowing Joe for more than a decade, the CFO believed him but since they do not record their phone calls, they decided to immediately get their corporate attorney involved in the matter.

In the meantime, the question came about as to whether the company should start recording their collection calls as a way to defend against any accusations that the collector was anything but very professional on the phone.

Requesting my thoughts, here’s my take on why Joe’s company, or any company, should record its collection phone calls:

First, in this very litigious day and age, recording in-house collection phone calls can provide a company with a critical layer of protection against claims of unprofessional behavior. This can be particularly useful in cases where a debtor alleges harassment, misrepresentation, or inappropriate conduct. A well-documented call history ensures that the company has factual proof to refute false claims, reducing the risk of legal action or reputational damage.

Then beyond legal protection, call recordings can also serve as a training tool for collection professionals. By reviewing actual calls, management can assess the professionalism and effectiveness of their collectors. If a collector is found to be using an aggressive or inappropriate tone, the company can take corrective action before any complaints escalate. Conversely, if a collection issue arises, supervisors can listen to the call and determine if the collector followed the company policy, as well as industry standards.

Additionally, recorded calls help to ensure compliance with debt collection laws. By maintaining records of conversations, a company can demonstrate that its collectors adhere to legal requirements regarding communication, debt verification, and debtor rights. This can be invaluable in the event of a regulatory audit or legal dispute.

Finally, having recorded calls can improve overall customer relations. If a debtor disputes the details of a payment agreement or claims they were not informed of specific terms, the company can refer to the call recordings for clarification. This not only helps resolve misunderstandings efficiently but also builds trust by demonstrating transparency and accountability in the collection process.

So, in essence, my advice to Joe and his company is to continue working with their corporate counsel to implement and maintain a call recording system that is in compliance with their state regulations and effective in maintaining transparency and professionalism.

Hector

Hector the Collector is a credit, collection, and human resources advice column by Nancy Seiverd President CMI Credit Mediators Inc. Your thoughts and comments (nseiverd@cmiweb.com) are most welcome!

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