Occupational Outlook:
Bill and Account Collectors
Significant Points
- About 1 in 5 collectors works for a collection agency;
others work in banks, retail stores, government, physicians’ offices,
hospitals, and other institutions that lend money and extend credit.
- Most jobs in this occupation require only a high school
diploma, though many employers prefer workers with some postsecondary
training.
- Faster-than-average employment growth is expected as
companies focus more efforts on collecting unpaid debts.
Nature of the Work
Bill and
account collectors, called simply collectors, keep track of accounts
that are overdue and attempt to collect payment on them. Some are employed by
third-party collection agencies, while others—known as “in-house
collectors”—work directly for the original creditors, such as department stores,
hospitals, or banks.
The duties of bill and
account collectors are similar in the many different organizations in which
they are employed. First, collectors are called upon to locate and notify
customers of delinquent accounts, usually over the telephone, but sometimes by
letter. When customers move without leaving a forwarding address, collectors
may check with the post office, telephone companies, credit bureaus, or former
neighbors to obtain the new address. The attempt to find the new address is called
“skip tracing.” New computer systems assist in tracing by automatically
tracking when customers change their address or contact information on any of
their open accounts.
Once collectors find the
debtor, they inform him or her of the overdue account and solicit payment. If
necessary, they review the terms of the sale, service, or credit contract with
the customer. Collectors also may attempt to learn the cause of the delay in
payment. Where feasible, they offer the customer advice on how to pay off the debts,
such as by taking out a bill consolidation loan. However, the collector’s prime
objective is always to ensure that the customer pays the debt in question.
If a customer agrees to
pay, collectors record this commitment and check later to verify that the
payment was indeed made. Collectors may have authority to grant an extension of
time if customers ask for one. If a customer fails to respond, collectors
prepare a statement indicating the customer’s action for the credit department
of the establishment. In more extreme cases, collectors may initiate
repossession proceedings, disconnect the customer’s service, or hand the
account over to an attorney for legal action. Most collectors handle other
administrative functions for the accounts assigned to them, including recording
changes of addresses and purging the records of the deceased.
Collectors use computers
and a variety of automated systems to keep track of overdue accounts.
Typically, collectors work at video display terminals that are linked to computers.
In sophisticated predictive dialer systems, a computer dials the telephone
automatically, and the collector speaks only when a connection has been made.
Such systems eliminate time spent calling busy or nonanswering numbers. Many
collectors use regular telephones, but others wear headsets like those used by
telephone operators.
Working Conditions
In-house
bill and account collectors typically are employed in an office environment,
while those who work for third-party collection agencies may work in a
call-center environment. Workers spend most of their time on the phone tracking
down and contacting people with debts. The work can be stressful as some
customers can be confrontational when pressed about their debts, although some
appreciate assistance in resolving their outstanding debt. Collectors may also
feel pressured to meet targets for the amount of debt they are expected recover
in a certain period.
Bill and account collectors
often have to work evenings and weekends, when it usually is easier to reach
people. As a result, it is not uncommon for workers to work part time or on
flexible work schedules, though the majority work 40 hours per week.
Training, Other
Qualifications, and Advancement
Most
bill and account collectors are required to have at least a high school
diploma. However, employers prefer workers who have completed some college or
who have experience in other occupations that involve contact with the public.
Workers should have good communication skills and be computer literate; experience
with advanced telecommunications equipment is also useful.
Once hired, workers usually
receive on-the-job training. Under the guidance of a supervisor or some other
senior worker, new employees learn company procedures. Some formal classroom
training also may be necessary, such as training in specific computer software.
Additional training topics usually include telephone techniques and negotiation
skills. Workers are also instructed in the laws governing the collection of
debt as mandated by the Fair Debt Collection Practices Act (FDCPA), which
applies to all third party and some in-house collectors.
Workers usually advance by
taking on more duties in the same occupation for higher pay or by transferring
to a closely related occupation. Many companies fill supervisory positions by
promoting individuals from within the organization, and workers who acquire
additional skills, experience, and training improve their advancement
opportunities.
Employment
Bill and
account collectors held about 456,000 jobs in 2004. About 1 in 5 collectors
works for a collection agency. Many others work in banks, retail stores,
government, physician’s offices, hospitals, and other institutions that lend
money and extend credit.
Job Outlook
Employment
of bill and account collectors is expected to grow faster than the average for
all occupations through 2014. Cash flow is becoming increasingly important to
companies, which are now placing greater emphasis on collecting unpaid debts
sooner. Thus, the workload for collectors is expected to continue to increase
as they seek to collect not only debts that are relatively old, but ones that
are more recent. Also, as more companies in a wide range of industries get
involved in lending money and issuing their own credit cards, they will need to
hire collectors, because debt levels will likely continue to rise. In addition
to job openings from employment growth, a significant number of openings will
result from the high level of turnover in the occupation. As a result, job
opportunities should be favorable.
Hospitals and physicians’
offices are two of the fastest growing industries requiring collectors. With
insurance reimbursements not keeping up with cost increases, the health care
industry is seeking to recover more money from patients. Government agencies
also are making more use of collectors to collect on everything from parking
tickets to child-support payments and past-due taxes. Finally, the Internal
Revenue Service (IRS) is looking into outsourcing the collection of overdue
Federal taxes to third-party collection agencies. If the IRS does outsource,
more collectors will be required for this large job.
Despite the increasing
demand for bill collectors, employment growth may be limited due to an
increased use of third party debt collectors, who are generally more efficient
than in-house collectors. Also, some firms are beginning to use offshore
collection agencies, whose lower cost structures allow them to collect debts
that are too small for domestic collection agencies. Contrary to the pattern in
most occupations, employment of bill and account collectors tends to rise
during recessions, reflecting the difficulty that many people have in meeting
their financial obligations. However, collectors usually have more success at
getting people to repay their debts when the economy is good.
Earnings
Median
hourly earnings of bill and account collectors were $13.20 in May 2004. The
middle 50 percent earned between $10.87 and $16.28. The lowest 10 percent
earned less than $9.22, and the highest 10 percent earned more than $20.10. In
addition to a basic rate of pay, many bill and account collectors earn
commissions based on the amount of debt they recover.
Related Occupations
Bill
and account collectors review and collect information on accounts. Other
occupations with similar responsibilities include credit authorizers, checkers,
and clerks; loan officers; and interviewers.
Source: U.S. Department of Labor, Bureau of Labor Statistics
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