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Showing posts with label Debt Collection. Show all posts
Showing posts with label Debt Collection. Show all posts

Saturday, June 17, 2023

Debt Collectors Want To Use AI Chatbots To Hustle People For Money

Corin Faife
vice.com
Originally posted 18 MAY 23

Here are two excerpts:

The prospect of automated AI systems making phone calls to distressed people adds another dystopian element to an industry that has long targeted poor and marginalized people. Debt collection and enforcement is far more likely to occur in Black communities than white ones, and research has shown that predatory debt and interest rates exacerbate poverty by keeping people trapped in a never-ending cycle. 

In recent years, borrowers in the US have been piling on debt. In the fourth quarter of 2022, household debt rose to a record $16.9 trillion according to the New York Federal Reserve, accompanied by an increase in delinquency rates on larger debt obligations like mortgages and auto loans. Outstanding credit card balances are at record levels, too. The pandemic generated a huge boom in online spending, and besides traditional credit cards, younger spenders were also hooked by fintech startups pushing new finance products, like the extremely popular “buy now, pay later” model of Klarna, Sezzle, Quadpay and the like.

So debt is mounting, and with interest rates up, more and more people are missing payments. That means more outstanding debts being passed on to collection, giving the industry a chance to sprinkle some AI onto the age-old process of prodding, coaxing, and pressuring people to pay up.

For an insight into how this works, we need look no further than the sales copy of companies that make debt collection software. Here, products are described in a mix of generic corp-speak and dystopian portent: SmartAction, another conversational AI product like Skit, has a debt collection offering that claims to help with “alleviating the negative feelings customers might experience with a human during an uncomfortable process”—because they’ll surely be more comfortable trying to negotiate payments with a robot instead. 

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“Striking the right balance between assertiveness and empathy is a significant challenge in debt collection,” the company writes in the blog post, which claims GPT-4 has the ability to be “firm and compassionate” with customers.

When algorithmic, dynamically optimized systems are applied to sensitive areas like credit and finance, there’s a real possibility that bias is being unknowingly introduced. A McKinsey report into digital collections strategies plainly suggests that AI can be used to identify and segment customers by risk profile—i.e. credit score plus whatever other data points the lender can factor in—and fine-tune contact techniques accordingly. 

Thursday, May 31, 2012

Damaged Fairview ousts exec

Mark Eustis was linked to firm behind high-pressure debt collections

by Maura Lerner and Tony Kennedy
The Star Tribune
Star Tribue Staff Writers
Originally published May 24, 2012

Mark Eustis, CEO of Fairview Health
Mark Eustis couldn't have known it at the time, but his downfall as president of Fairview Health Services began last summer with the report of a stolen laptop. Within 10 months, the incident had grown into a public relations nightmare that Fairview couldn't shake.

On Thursday, Eustis, 59, abruptly announced plans to retire, one day after Fairview's board voted not to renew his contract. It was just four weeks after Attorney General Lori Swanson released a scathing report about debt collectors badgering patients for money inside Fairview hospitals.

Initially, the board had said Eustis' job was safe. But criticism has mounted over Fairview's association with Accretive Health, the for-profit company Swanson blamed for the collection practices.

Eustis found himself at the center of the turmoil because he was instrumental in hiring Accretive and has a son who works for the firm.

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Dr. Steve Miles, a University of Minnesota physician and bioethicist, said the most disturbing revelations weren't just about heavy-handed debt collectors, but internal e-mails in which Accretive employees talked about patients as "lowlifes" and "deadbeats."

The entire article is here.

Thanks to Gary Schoener for this lead.

Stalking Patients at Hospitals

By Michele Goodwin
The Chronicle of Higher Education - Blogs
Originally posted on May 23, 2012

Next week, Sen. Al Franken, a Minnesota Democrat, will chair a field hearing on the effectiveness of federal laws to protect patients’ access to care and privacy.  The hearing comes on the heels of Minnesota Attorney General Lori Swanson‘s accusing Accretive Health–one of the nation’s largest debt-collection agencies–of excessive and possibly illegal tactics, including strong-arming patients in Minnesota hospitals.  A voluminous six part report can be found here.  However, the issue extends beyond Minnesota as Accretive has contracts with hospital systems throughout the nation.

According to the attorney general’s report, the Illinois-based collection agency hid in hospital waiting rooms and even stalked patients in convalescing rooms to collect payments before and after treatments.  Those desperate tactics are particularly troubling because they occur when patients are seeking emergency medical care.  The cases highlighted by Swanson’s office detail clandestine debt collection schemes that not only misrepresent hospital staff, but may have a deterrent effect on individuals seeking treatment.

The entire story is here.