Demand Deposit Account Collections Solutions For Banks and Credit Unions

[?] Subscribe To This Site

Demand Deposit Account Collections
Solutions For Banks and Credit Unions

Demand deposit account collections have risen dramatically as a result of the country's economic downturn. With ever-increasing job layoffs and unemployment, consumers are straining to make ends meet. Because of this, banks, credit unions, and other lenders are grappling with more and more unpaid debt.

Loan defaults, credit card delinquencies and chargeoffs, as well as the shrinking value of their mortgaged real estate portfolios are some of the issues facing national and local banks and credit unions. Another major problem, although less talked about in the media are banks' growing demand deposit account collections. These are the checking accounts, and ATM/check cards that consumers love because of the convenience they offer.

The ease of quick access to cash 24/7 offered at thousands of ATM's across the country and around the world is something we take for granted. The problem for banks come because those demand deposit accounts can be easily overdrawn. Consumers who don't keep accurate account balances, or balance their checkbooks often can find their accounts depleted, and in the negative.......this is especially true when writing paper checks.

While most account holders are good at managing their checking accounts, the problem is great enough that these demand deposit accounts cost banks and credit unions millions annually in uncollected overdraft NSF and other fees.

Internal Collections Problems

Another problem is the difficulty, time-consuming and costly aspect of trying to collect these DDA accounts internally. Many banks give greater priority and attention to delinquent loans and credit card debts, because of the larger balances they represent. Since DDA accounts tend to be much smaller balances, they tend to fall by the wayside. Many are simply written off as a loss.

While a typical demand deposit account chargeoff may not be a lot of money, their combined amounts represent and make up a substantial portion of a bank's total delinquent debt portfolio.

Poor Collection Agency Results with DDA Accounts

Added to that, while a bank's internal collections efforts aren't very effective, or may not be deemed a high priority, outsourcing these DDA accounts to third party collection agencies often prove to yield disappointing results. Partly because the recovery rates, more often than not, are pretty dismal. Sometimes it can be difficult to track down an account holder. Especially if they've relocated to another city or state.

The fact is many collection agencies, commissioned on a percentage of the money they recover, also tend to treat these as low priority items. Many give greater attention to larger-sized credit card and loan accounts.

There are, however, collection agencies that specialize in the smaller demand deposit account balances.

Internal Processes That Yield Better Collection Results

Part of the key to successful internal demand deposit account recovery requires banks and credit unions to become more proactive and institute systems to monitor and predict potential problems. A possible "red flag" might be noticing sudden modifications in spending behavior. For overdrawn customers, offering payment arrangements early on before charging off the account, and before the account holder opens another checking account at another institution, might be an option.

The point is to notice problems and act early. With a good internal plan in place, banks can easily spot potential problems and prevent them from growing into larger, more expensive ones. You will be able to separate the customers truly experiencing a financial "bump in the road" from the habitual abusers of demand deposit account privileges.

Know When to Outsource Problem Accounts

It is also important, as it relates to the more difficult problem customers, to offload and outsource those quickly to a collections agency. Time is of the essence with delinquent accounts, and the likelihood of successfully collecting on these decrease exponentially the more time passes. No bank or credit union should hold onto delinquent demand deposit accounts past 60 days.

Research collection agencies that specialize in and have experience working with bank demand deposit accounts. Look for agencies that will give these the same focus and level of attention as they do larger balance accounts. Third party intervention offers the psychological impact, and is the catalyst that motivates past due customers to contact their bank and make payment arrangements.

DebtCollectionSteps.com consultants have many years of experience working with banks and credit unions. We also know the agencies that are a better fit for a bank's demand deposit account problems.

If you would like a debt collection quote, complete the brief form below. One of our bank collection consultants will contact you within 24-48 hours.

Collection Agency Quote Request

Please note that all fields followed by an asterisk must be filled in.

Company*
Company*

Your name, and position*
Your name, and position*

E-mail Address*
E-mail Address*

Web Site URL

Street Address*
Street Address*

City*
City*

State/Prov*
State/Prov*

Business Phone*
Business Phone*

Best time to contact

What services are you interested in?*
What services are you interested in?*

	Bank/Credit Union Collections
	Commercial Collections
	Consumer Collections
	Medical Collections
	NSF Check Collections
	Debt Portfolio Scoring Analysis

Total dollar amount of accounts?*
Total dollar amount of accounts?*

How often do you need these services?

Additional or Standalone Services

	Credit Reporting Services to 3 Bureaus
	Consumer/Commercial Credit Check Services
	Debt Portfolio Scoring Analysis
	Skip Tracing Services
	Electronic Check Deposit (eliminate bank trips to deposit checks)
	Check Guarantee Services (never get burned with another NSF check)
	e-Merchant Terminal (accept credit/debit cards online, and remotely with any cell phone)
	Lower your Visa/MC/Debit Card processing fees.....Guaranteed!

Additional notes

Please enter the word that you see below.

Return to Bank Card Debt from Demand Deposit Account.

Home | About Us | Contact Us | Debt Collection Quotes