Collector - April 2021 - 26

T

How ACA and its
members help
consumers better
understand financial
tools and services.
By Tim Dressen

26

he 21st century is a strange and
complex time to be a consumer.
More information than ever is
accessible on demand to anyone with a
smartphone or other connected device,
making it easy to find information about
any topic. Unfortunately, much of the
information available online comes
from questionable sources-some with
ulterior motives and some with no real
qualifications to espouse their " wisdom. "
This environment of hazy information often
creates confusion and conflict for consumers
facing debt problems. Collectors attempting
to recover money for clients frequently need
to educate consumers, correct misconceptions
and teach them better options for managing
their finances.

THE NEED
Poor financial literacy can play out in
several different ways during interactions
between consumers and collectors.
In some cases, lack of understanding
contributes to a debt remaining unpaid and
going to collections.
" A lot of people wait until a debt is in
collections because they don't understand
their explanation of benefits, how insurance
covers certain things or what their portion
of the bill truly is, " said Hunter Quinn,
operations manager for Continental Credit
Control. " That's really a problem with the
insurance industry. It's very confusing. "
With medical debt, consumers often don't
understand the difference between a copay
and coinsurance. They may have received
a preauthorization from their insurance
company for a procedure but do not realize
that's not a guarantee that the insurer will pay.
Other times, consumers fail to grasp the
scope of their bills, the individual factors
contributing to the bottom line like interest
or fees, and the benefits or consequences that
come with their payment choices.
" If interest accrued, they often don't
understand the reason, how it is calculated
and why it is owed, " said Tina Hanson,
IFCCE, executive vice president and chief
strategy officer for State Collection Service.

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Collector - April 2021

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