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Hey folks,

As we kick off the new year with fresh energy and new goals, it’s the perfect time to bust some collection myths floating around that might be slowing you down.

So, grab a cup of coffee and read along to see how many of these can you relate to.

Myth #1 Only Delinquent Accounts Need Collections.

Collection communication is a reactive process that is triggered when an account becomes overdue. For credit unions and community banks, recovery is the only priority, and proactive efforts to prevent delinquency are unnecessary.

But, this is far from the truth.

The Reality: Modern collections strategies are as much about prevention as they are about recovery. By engaging proactively with members before their accounts become overdue, credit unions and community banks can reduce the likelihood of overdue payments before they even occur. 

Myth #2 Automated Collections are Impersonal.

Automated collections compromise a member-first approach – it lacks the personal touch needed to build strong trusting relationships and doesn’t account for the unique needs and challenges of each member.

But, it’s a complete misconception.

The Reality: Automation doesn’t take away the personal touch, on the contrary, it can help credit unions and community banks communicate at scale and create convenience for the staff while still being empathetic, personal, and member-focused.

Myth #3 Collections Hurt Member Relations

Collections are only about extracting money, hence it is bound to strain the relationship between financial institutions and their members. Persistent phone calls, letters, or legal notices can create a sense of pressure, stress, and resentment among members, especially those facing financial difficulties.

In reality, that’s just not the case!

The Reality: Traditional methods – such as phone calls and impersonal letters – often create frustration, leaving members feeling like a number rather than a valued part of the institution. The reality is that collections are not about demanding payments but rather about working together with your members to find a solution through tough times.

Myth #4 All Collections Calls Must be Made by an Agent.

All collection work needs to be handled by human agents to be effective. Personal touch and empathy of a human are important to successfully manage delinquent accounts and maintain positive relationships with members.

But, that’s just one side of the coin!

The Reality: We agree 100%, only human interactions can provide the level of empathy and understanding your members need during sensitive financial conversations. However, many routine collection tasks don’t. Saving some of the time and energy spent on routine tasks can help your collection agents focus on the accounts that need their attention most.

Myth #5 You can Only Collect During Business Hours.

Collections happen on phone calls made by agents working standard 9-to-5 shifts. Credit unions’ and community banks’ staff have a narrow timeframe to quickly engage and serve their members

But, this is not the full picture.

The Reality: Modern collections tools have changed the game. Credit unions and community banks can now facilitate collections anytime, anywhere – especially during off-hours, when members are more likely to be available. This helps improve response rates and ensures a more respectful, smoother collection process.

Looking Ahead with Eltropy

Breaking free from the outdated myths surrounding debt collection isn’t just about improving processes – it’s about reimagining what’s possible with digital innovations to deliver a frictionless and pleasant experience for both members and staff.

Eltropy’s Collections 2.0 suite is here to help. 

Our seamless, AI-driven collections solution is designed to help Credit Unions and Community Banks carry out member-centric collections in a private, empathetic, and non-intrusive way. With Eltropy, you can enhance recovery rates, boost agent productivity, and improve cash flow – all while turning every interaction into an opportunity to build stronger member relationships with the right tools and strategies.

It’s time to break through the noise, debunk the myths, and create a fresh collections experience – one that empowers both your team and members to thrive. Let us connect!