Last month I helped wrap up the Weltman, Weinberg & Reis webinar series on auto loan recovery. Weltman is a Cleveland, Ohio-based collections law firm. The first webinar focused on the early stages of auto recovery. You can read my recap and link to the blog replay here. In the second webinar, I joined Weltman attorneys Scott Fink, David Head and Dave Tommer to talk about what happens after repossession of auto collateral.
Data availability and quality is stronger now than ever, so we encourage lenders to use that to their advantage at all stages of the loan cycle. For this discussion, I focused on use of data and risk scoring to help lenders maximize collections results. The loan recovery process begins immediately after the asset is liquidated – for auto loans, that’s when the vehicle has been repossessed and sold at auction. We work with lenders to use analytics in loan recovery in a few ways.
First, we can help lenders look at available data with a different lens. DRN cameras capture 215 million license plate scans per month in 390 markets nationwide, building on our 16-17 billion scans in our database. By lining up this historical and real-time license plate recognition (LPR) data with public records and other data sets, we can look at whether a lender’s consumer data lines up with the location history of the vehicle. We can do historical analysis to determine if the consumer is still at a residence and his/her place of employment, as well as known associates. We can even determine if the consumer has purchased or leased another vehicle, which can help us locate the individual. Building these stories can help lenders find debtors and make contact faster, improving collection efficiency and success.
We’re also working with lenders to use risk scoring to prioritize which debts to pursue first – the “low-hanging fruit” of their portfolio. We can analyze debt portfolios and score consumers for risk to learn which have the greatest chance to skip vs. which bring the greatest chance for collection. We can score known addresses against vehicle sightings to assess validity of data – has the borrower moved without letting the lender know, or is his/her given address vacant or being lived in by a new tenant? All of this can help lenders determine which accounts may be quickest to collect on – which helps with cash flow. On the other side, lenders can see which accounts may be more challenging and need additional resources.
Dave Tommer spoke about the collections process, and the importance of using data to track consumers to stay aware of when key information is changing. He also talked about the importance of communicating delinquency and deficiency balances through various notices, and the importance of retaining those records. Failure to do either of these properly can lead to judgment against the lender should the case reach litigation. Dave also discussed key factors when considering settlement along with criteria lenders and attorneys use when deciding to pursue litigation.
David Head then took us through several questions and answers about litigation specifically. Similar to collections, documentation is critical. Requirements vary by state, but he noted that the right documentation alone can often beat most defenses brought by a defendant. He also discussed where litigation is typically filed and talked through the basic process, from complaint all the way to trial. He noted that timelines from case filing to judgment typically run six months for uncontested cases to up to a year for contested ones.
Finally, Scott Fink discussed considerations when a debtor has declared bankruptcy. The process varies based on type of bankruptcy but Scott’s resounding message was – regardless of filing type – that lenders should always file claims to recoup debt from borrowers when any type of bankruptcy is in play. Again, documentation is critical.
Thanks to the Weltman team for organizing these informative sessions – and for asking me to participate.
– Jeremiah Wheeler, EVP and GM, DRN Data