Friendly, empathetic, and ready to listen: DebtManagers aren’t your typical debt collectors.
“We deal in a number of connections, not collections,” says Kieran Stott, General Manager of Collections. “Our work is about our customers and managing the relationship. It’s a far cry from what the debt collection industry has traditionally been.”
DebtManagers is a Kiwi-owned debt management company headquartered on Rosebank Road, with satellite agents around the country and in Australia. Founded in 1997, the business purchases “bad debt” from vendors and other creditors and takes on that debt – as well as the customer who incurred it. It’s at this point, Kieran explains, where their approach differs from the norm. Rather than aggressively pursue their new customer or charge additional interest and fees, DebtManagers’ people-centred approach seeks to turn painful financial missteps into powerful opportunities for change.
“Bad debt” is a term applied when a business or lender determines that a customer “won’t” pay what they owe. Once that debt is transferred to a collection agency, the agency usually makes contact with the customer to set up a rapid-fire payment schedule to recover that cost as quickly as possible.
But Kieran says this approach doesn’t take into account the customer’s overall financial situation.
“We often find it’s not that the customer ‘won’t’ pay, but that they can’t pay the original terms, or they don’t prioritise their debt,” he says. “It might be that paying their power bill that week is a higher priority than paying the debt. People might not be able to pay $70 a week or $50 a week or a settlement in full because, simply, they’ve got other priorities.”
The solution for the DebtManagers team is to apply empathy and understanding. “Our mission is to create a fair financial world where everybody thrives,” he says. “We have community agents who sit down and speak with people in their homes. We don’t charge fees or excessive interest. We set manageable payments and work with the customer to see those through until such time as those debts are paid in full.”
But the task doesn’t end there. DebtManagers’ ultimate goal is to not only to clear that debt, but to guide the customer back to being an active consumer. “Once the debt is paid in full, we can then remedy the customer’s credit score. This means they can return to getting credit without additional costs, and without defaults sitting on their credit history.”
“Just because you’ve got a bill outstanding doesn’t mean that you can’t be a functioning member of society,” he adds. “It shouldn’t mean you can’t get a good education for your children or a good rental agreement.”
As might be expected, cold-contacting and building a relationship with someone mired in a difficult financial situation is not an easy task. “It is hard work,” says Kieran. “You do need to have a thick skin. At the end of the day, you still are travelling throughout New Zealand, knocking on people’s doors and essentially asking for money.”
Often, the best people for the job are those who have been in a similar position to the customers they serve. “To be empathetic, you need to be able to step into someone else’s shoes,” Kieran says. “A lot of our employees formerly owed money and needed a job opportunity when they were getting back on their feet. We also have staff who have come through referrals from budgeting services, as well through our financial mentor network. So when companies say they’ve got diverse staff, we really do. We’re a good bunch.”
For their customers, DebtManagers’ support can have a lasting positive impact. The team’s approach to outreach is to be both empathetic and solutions driven, which can include providing opportunities for financial education. For example, ‘breathing space’ of three months can be applied to a customer who is open about needing more time to begin repayments, after which their situation is re-evaluated by a dedicated triage team. Customers are frequently referred to debt mentors and organisations that provide budgeting advice, such as the Salvation Army and Good Shepherd. The team is also trained to spot signs of financial harm, a form of abuse where someone control’s another person’s finances.
“We service the whole of New Zealand, and we have relationships with financial mentors right across the country,” says Kieran. “When we’re in an area, we’ll engage with the local financial mentor and let them know we’ll be referring people for budgeting support.”
DebtManagers also offers a debt relief programme for customers. “We are all about being fair, and that goes both ways,” says Kieran. “We believe there is a social contract and that you should pay your debts, but sometimes paying a debt back might leave a person in a really vulnerable position, and that’s not good for anyone. So we have a debt relief process where we consider a person’s circumstances, and if they’re engaging with a financial mentor, we’ll write the debt off.”
Unsurprisingly, the response to the approach of the DebtManagers’ team is often pleasant surprise, as indicated by the consistently high net promoter score earned by their community outreach team. Kieran says that their face-to-face way of doing business makes all the difference.
“It’s a big cultural thing in New Zealand – you sit down with someone and you break bread. There’s a Māori term, kanohi ki te kanohi, which means face to face. It’s how a lot of people prefer to carry out their business, instead of picking up the phone and calling faceless corporations.”
As self-described “positive disruptors” in the industry, DebtManagers is driving the adoption of a code of conduct for debt collection practises in New Zealand. “Unlike most countries, the conduct of debt collectors has very light regulation, and we don’t think this is right. Working with financial mentors, NGOs, customers, and clients, we’ve come up with our own code of conduct for the industry, to better govern how customers are treated. It’s in the final stages and we’re hoping to launch it more widely soon.”
Kieran invites any local business with debt they’d like to sell to get in touch. “We’re happy to take it off your hands, and we’ll treat your customer the same way you would. That’s the longevity piece in this industry – all our vendors know that we’re going to treat their customers well.”
As part of DebtManagers’ annual fundraising drive, Kieran also invites any netball fans to join their upcoming charity tournament at Action Sport West in Henderson on September 20. “It’s $5 a head,” says Kieran, “and all of the proceeds go to Fair Food on Rosebank Road.”
For more information, contact Kieran Stott on 021 485 625.