5 Credit Union Repossession Strategies
There are many variations to repossession strategies but the one that generally gets the best auto recovery results for credit unions has 5 simple elements.
- Multiple repo agents or repossession management firms (forwarders)
- Relatively short assignment durations
- Multiple rotations for pre-charge off and post charge off
- Frequent and transparent scorecards
- A process for rewarding and penalizing repo agents/forwarders based on performance
These 5 basic elements can be used among credit unions of all sizes. Before implementing, you should analyze your current auto repossession strategy and assess which of the 5 elements above are needed. Below is additional perspective on each issue:
Multiple Vendors – Depending on your repossession volume, the optimal number of agents/repossession management companies seem to be 3-4. For smaller credit unions, this number may be 2-3. Having multiple repo agents or forwarders help create real competition.
Assignment Duration – Probably the biggest mistake that we see many credit unions make, is leaving assignments with a repo agent or forwarder/skip companie too long. After a certain period of time, the agent/forwarder is putting little effort into progressing the case. If your agents/vendors have not recovered the vehicle in a certain time period, it is highly improbable that they ever will.
Multiple Rotations – We suggest having 5 rotations during the entire repossession process:
- Pre-Charge Off: 1 forwarder/agent placement + 1 skip placement
- Post Charge Off: 3 skip placements (60,90,90-day duration)
Regular/Transparent Scorecards – We suggest the below approach for the best results among your multiple vendors:
- Published at least monthly
- Transparent which means that the scorecard methodology is fully disclosed to each vendor
- Batch Focused
Rewards/Penalties – Some credit unions have figured this out and reallocate market share at least once per quarter and the top 1-2 performers get the lion’s share of the business.
I believe it is in your best interest to work the case for no more than 30 days, and then should be reassigned to another agent to be worked,but I also see that some forwarding companies wait to long to assign the work, which in return does not give the agent enough time to locate the vehicle and or the detbors