After two decades of working for a collections agency, Donna Nicholson Stief knows nobody wants to get a call from her place of business.
But she also wants people to know that if they do get a call, there’s no reason to be afraid.
And while her debt collectors are primarily interested in resolving an unpaid bill, she says they’re also going to listen. And they’re going to be respectful.
“We feel very strongly that everyone deserves to be treated with dignity and should be treated with dignity. That’s our approach,” said Nicholson Stief, executive director and chief compliance officer of the Credit Bureau of Lancaster County.
“Strong arming people, that’s a very old, outdated, ineffective tactic. It’s just going to get the debt collector in trouble. It just makes no sense,” she said.
Nicholson Stief, who oversees 25 employees at the credit bureau’s office at 218 W. Orange St., says she continually works to dispel old notions of debt collectors as bullies.
“The reputation of the collection industry is one we work really hard to change.” she said. “No one is going to change it for us, so we have to change it ourselves.”
During her career, the 49-year-old Lititz resident has worked to change that reputation by being active in industry associations, serving as president of the Mid-Atlantic Collectors Association, a unit of ACA International, which represents debt collectors.
And, she was recently named one of the “20 Most Powerful Women in Collections” by trade magazine Collection Advisor.
“I’m not much of a spectator,” she said. “It’s important for me to be involved with many different facets.”
A bureau’s history
The Credit Bureau of Lancaster County was begun in 1947 by a group of business people who wanted to share information about people’s credit histories. Like many other credit bureaus around the country, it began as a community-based nonprofit organization.
Regulatory changes prompted the credit bureau to become a for-profit organization in the late 1990s. And while most of its employees today are involved in debt collection, it also offers employment screening, tenant screening and other services.
Nicholson Stief came on board in 1998 when she moved to Lancaster from King of Prussia and started looking for a job, just as the credit bureau had an opening overseeing its collections department.
Just like back then, most of the outstanding debts today are unpaid medical bills, for which the credit bureau will get a percentage of any amount that is collected.
Nicholson Stief said the percentage varies from client to client. She declined to provide a range for the amounts.
In all cases, the debt is aged, typically about a year or year-and-a-half old. And while the credit agency and its staff of trained professionals can be more successful in collecting overdue payments than the hospital or bank that turns over the debt, success is relative.
Nicholson Stief said the credit bureau would only expect to get back between 5 and 30 percent of what is owed. Collection rates above 30 percent indicate clients could probably have gotten more money back by just trying to collect it themselves, she said.
While that means most of the debt collections that agents call about will never be paid back, Nicholson Stief says it is crucial to not assume that.
“Even through there are some individuals who have no intention of paying back a legitimately owed bill, that does not taint our approach to each consumer,” he said. “Every call we have to go in believing they have good intentions to resolve the debt.”
Adapting to change
While Nicholson Stief says a kinder approach is more effective, much of the way the credit bureau operates is in response to regulation.
The industry has strict guidelines it needs to follow, carefully protecting the identity of people they contact as well as having to stop contacting anyone who specifically requests it.
Technology changes have also impacted the way the industry operates, with the proliferation of scammers making people more suspicious of phone calls as well as the potential to contact people through text or email, Nicholson Stief said.
While some debt collectors use text messages or email to collect debts, Nicholson Stief says the credit bureau relies on phone calls and mailers.
The laws governing the industry were written before those communication methods were available, so some debt collectors deploy them while taking extra care to ensure that only the person who owes the debt gets the message.
Another issue is consolidation of the banking and medical industries — two of the main clients of debt collectors — which has meant it can be harder to get those clients.
“The day when you could walk around the corner and get a little, independent hospital as a client, those days are over,” Nicholson Stief said.
However, most debt collectors are still small and mid-sized companies, like the credit bureau is, since most of their clients are small businesses that feel most comfortable working with a smaller firm, she said.
Despite her industry’s lingering negative reputation, Nicholson Stief is a firm believer in what she does, pointing to a 2016 study by ACA International that showed the industry returned $67.6 billion to creditors nationwide, including $3 billion in Pennsylvania.
“That’s a really good thing,” she said. “These are rightfully owed debts.”