Centralized Collection Helps Payday Loan Firm Stand Out

If you’re a payday lender – and there are a lot of you out there, it turns out; you’re like Legion – a constant dilemma is how best to differentiae yourself from all of the competition.  With most states regulating the maximum in fees and interest, getting consumers with immediate financial crises to choo-choo-choose you can be daunting.

Dollar Financial, based in Berwyn, Pennsylvania, may have a couple strategies that work: (1) Separate out the collections piece of your business, so that the folks interacting with the consumers aren’t the folks trying to collect from the consumers; and (2) Expand northward to Canada.

Dollar’s collection call center is located in Salt Lake City, and about 150 employees analyze customers’ borrowing patterns and payment records, then find them by phone.

"(If store managers collect money), it’s kind of spoiling the relationship with customers," CEO Jeffrey Weiss told Investor’s Business Daily. "You want customers to have a very pleasant relationship with store personnel."

Weiss says collection staffers call installment loan borrowers eight to 10 times to encourage payments. As a result, 75% of customers return to the store to make payments.  Which makes Dollar a very good collector – at least according to analysts.  The company’s charge-off rate was 1.8% in Q2 of fiscal 2007 — lower than the industry average of 3% to 3.5%.