The Truck Renting and Leasing Association (TRALA) turned its attention to a touchy subject, collections, during a business discussion Monday at its 2023 Annual Meeting in Bonita Springs, Fla.
Volvo Financial Services’ Mark Musumeci, Bob Pugh of Great Lakes Asset Solutions and Robert Hanna of the law firm Cohn & Dussi offered attendees guidance and best practices for communicating with past due customers and how to initiate a repossession when a customer’s situation becomes dire.
Speaking first, Musumeci says Volvo Financial Services has an account relations team that works full-time to develop and maintain relationships with finance clients. Musumeci says these relationships are vital when a customer’s payment situation goes south because customers who have a relationship with their lender are often more open to discussing their situation. He also notes a dialogue gives Volvo an opportunity to workshop possible solutions. Volvo Financial Services’ never wants to initiate a collection event until it has exhausted all other alternatives, he says.
“If you realize a customer is not able to make [a payment], how can you work with them?” Musumeci asks. “Sometimes we will look at a modification process.”
He also notes in cases where a customer has multiple assets, existing relationships can help a customer right-size their fleet with their financial capabilities.
Pugh says when a collection becomes inevitable, leasing companies and dealers should work with collection operators who understand how to find and acquire an asset in a safe, peaceful manner. Pugh says in these cases he advises lenders to provide any information they have “as quickly as possible.”
He also notes while customers should never be surprised by a repossession, they shouldn’t be tipped off to a time or date either. Referencing Musumeci’s statements on communication, Pugh says leasing companies and dealers can offer simple warnings to customers about what may happen if they continue to neglect their payment responsibilities without creating timelines or deadlines for customers to course correct.
“Don’t put a time frame on when you need to take [an asset] back,” he says. “That is the surest sign they will hide it or strip it.”
Dealers and leasing companies also shouldn’t overlook their legal options, says Hanna. Once a collection becomes possible Hanna says dealers and leasing companies should consult their attorney to determine their options. “Time is the enemy here,” he says.