Collecting Thoughts is C&R Software's podcast, presenting conversations with industry experts and insiders throughout the finance, software, and collections industries.
This week, our host, Christina, spoke with John Roy (JR), Assistant Vice President of Collections and Risk Mitigation at Connex Credit Union. With over 20 years of industry experience, JR concretely discusses preventing fraud and managing delinquency. He stresses the importance of protecting member investments and encouraging financial awareness.
JR also shares how his team settled charge-offs during the COVID-19 pandemic and offers a handy tip for developing memorable passwords. He explains the value of credit unions and their focus on sustaining long-term relationships centered on members.
Read on to learn more from their discussion.
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Name: John Roy (JR)
Profession: Assistant Vice President of Collections and Risk Mitigation at Connex Credit Union
Find JR on LinkedIn.
JR explains that working for a credit union means protecting the membership base. Bad actors who took out a loan for fraud or are cashing fraudulent checks need to be rooted out to protect the tens of thousands of other credit union members and their investments. He stresses the need to mitigate fraud, even if it means inconveniencing some members.
JR warns that fraudsters rely on legal loopholes at every step of the collections process to exploit risk. In one effort to prevent that risk, his credit union relies on an artificial intelligence program that identifies high fraud risk checks before they are deposited.
If that means that I have to hold the check for seven days or five days in order to prevent our membership from losing $50,000 then, yeah, I'm going to do that every single day of the week.
JR warns credit union members to avoid messages on social media asking for money. He shared that one of the hardest conversations he has with members is when someone's child is scammed, and the member must be held liable for the funds withdrawn, according to their contract with the credit union.
It's a terrible conversation. We like to stop that before it happens, which is why we do a lot of partnering with financial awareness in our community to make sure that people are aware of these types of scams. Because people think that it tends to be the elderly that are the most preyed upon. But with technology the way it is today, it's actually everybody that's being preyed upon.
As a bonus, JR shares his advice on creating memorable and unhackable passwords: Use a line from an easy-to-remember song for each of your financial institutions. For example, if you choose "Somewhere over the Rainbow," then the first password would be "Somewhere over the Rainbow," and the second password would be "Way up high." Just remember to incorporate a few numbers and symbols.
JR shares that while everyone on his team deals with a different segment of the delinquency process, he encourages them to personalize their approach "as long as it's in a firm, compassionate, professional manner."
It just could be that you have a elderly woman who just wants to speak to a man on the phone. It happens. And sometimes you have a young person who just wants to speak to a woman. And all this is acceptable to us, and we're happy to deal with that. We can't take offense to it is the main thing.
For JR, that approach is what he calls the Spider-Man rule, which allows each member of the delinquency process one opportunity to deliver a payment late.
Everybody gets one save…As long as you communicate with me.
JR explains that at the credit union, each employee has an account, giving them a stake in the collections game.
We're protecting our own money...You can be a little bit lenient but are you okay with them not paying their $500 payments? Or do you want that $500 if it was your money? Because it is partially your money. So it's always firm, it's always professional, but at the end of the day it's always going to be compassionate.
JR shared with Christina that over the years, he has received several thank you letters and phone calls from people he has repossessed. He said they realize that the education they receive during the repossession call on how to manage their finances can save them from future charge-offs.
[The education] can greatly impact the credit score down the road.
During the COVID-19 pandemic, JR's team called members to ask if they wanted to use their stimulus check to settle charge-offs by negotiating settlements. He added that The approach benefited both the credit union and its members when his office faced moratoriums on collecting or repossessing during the pandemic.
If a member faces problems in the future due to the charge-off, JR is willing to write a letter or make a call vouching for that member's financial soundness. He added his credit union is much like the one pictured in the classic film "It's a Wonderful Life" starring Jimmy Stewart.
At the end of the day, we want to protect your money, because we're banking with ourselves.
Visit the C&R Software blog to learn more about finance, software, and collections industry topics from insiders and experts like JR.
Stay tuned for future episodes of Collecting Thoughts, where host Christina dives deep into more interviews with leaders from across the debt recovery and software world.