E News Update

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RETAIN ACCOUNTHOLDERS, REDUCE CHARGE OFFS

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E News Update

  1. 1. American Agencies February 21, 2012 Retain Accountholders, Reduce Charge-Offs Take Proactive and Comprehensive Steps to Maximize OD Program Performanceby Larry Giustiniani, Successful pre-charge off American Agencies collections should:When it comes realizing the full Initiate collection effort just Why Pre-Chargepotential of your overdraft program, after suspension of overdraft Off Collections?retaining customers is paramount. privilege using diplomatic andContacting customers and resolving efficient efforts to move pre-charge- Using a third-party collectionpast due balances prior to charge- off customers toward resolution;off can be expensive, as can the partner to retain pre-charge • Allow your institution to maintainsubsequent costs of replacing control and ownership of the off customers can costunresolved customers. It is critical to accounts; LESS THAN FIVE PERcontrol time and cost associated • Include systematic writtenwith these collections so that income CENT of the recovered prompts that notify accountholdersgained through an effective overdraft of their overdrawn status and any pre-charge off dollars.program is not lost to charge-offs. pending negative reporting action, as well as specific instructions toPre-charge-off accounts can be satisfy the outstanding obligation;some of your institution’s most Cost less than 5% of the re-profitable, which makes them covered pre-charge-off dollars,worth salvaging. It is possible to making it an economical choice forretain accounts, however the tactics any institution seeking superiorfor doing so must go beyond the message across to the customer customer retention and non-inter-outbound letters and phone calls by and allows us to maximize collections est fee income results;bank personnel. without designating personnel to Provide a no-cost interface with your institution’s existing overdraft those efforts.”•Those efforts can be ineffective dueto the proliferation of phone program software files. For over 30 years American Agenciestechnology (i.e., Caller ID and “Since changing our policy to allow has been a leader in the collect-voicemail), which has made it so courtesy overdrafts, we began ions industry and offers multipleeasy to avoid communication utilizing a collection firm’s customer overdraft collection programs foraltogether. It is not difficult for a retention solution, which has kept financial institutions nationwide.customer to delete electronic our charge-offs to a bare minimum. For more information, contact Larrymessages or simply avoid a call We have maintained complete Giustiniani at 914-771-7896 oraltogether. Most suspended control of our program customers lgiustiniani@americanagencies.comoverdraft customers can—and without alienating them and canshould be—reinstated back into reinstate customers that bring theiryour program, but the difficulty in accounts to a positive balance at ourcommunicating with them can easily discretion,” said Raul Oseguera,result in a charge-off instead. senior vice president of City National Bank, Newark, New Jersey.Implementing a proactive contactand customer retention approach “The service utilizes an automatedfrom a third-party collection www.americanagencies.com and secure process to easily transmit Programs for Improving Your Bottom Lineorganization can be an optimal accounts daily into the collectionsolution to maximize your overdraft system,” added Oseguera. “Theirprogram performance. systematic approach ultimately getsCopyright 2012, American Agencies. All rights reserved

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