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Be Afraid, Be Very Afraid



When I served as General Counsel to a national finance company, I only had to be a "hard-ass" once. Sure, I was often combative, disagreeable, and surly.  Certainly a smart-ass on a regular basis.  But a hard-ass?  Only once.


The situation occurred as I was walking through the collection floor at month-end.  I heard a collection manager raising his voice to a customer.  This grabbed my interest, so I made my way to his cube to listen in further.  Before I even got there, I heard him shouting into the phone "I hope there's good mass-transportation in Waco because otherwise you'll be walking to work".  Long story short, I paid his manager a visit, and when I heard excuses rather than action, I went above his head too, until the issue was brought to the CEO and a decision was made regarding the collection manager's continued employment with the company.    


Recently, while I was auditing recordings of a client's closings, I was unfortunately reminded of this story.   The salesperson was walking the buyer through the transaction documents and stopped at the section of the retail installment contract that addressed default.  After discussing how not making a scheduled payment is an event of default and can lead to repossession, the salesperson added "if you can't make a payment you need to call me, don't make me send a tow truck, if I have to do that I'll make sure you never drive in this town again".  Ouch.  


I was immediately concerned, and curious as to whether this was a "one off" occurrence, or whether this happened more frequently, so I zeroed in on some additional closings. I sampled about a handful more, and found that this salesperson said this or something similar to this about half the time.  I reached out to the client, shared my findings, and a performance improvement plan was put in place to make sure that this and every other salesperson understood the seriousness of such threats and the potential risk to the company.  The combination of new scripts and updated policies and training material should provide protection going forward, but you'd better believe there will be frequent audits.


What's the moral of the story? Ask yourself  whether you know what your employees are saying?  In the first example with the finance company, we had lots of written policies and robust training but it didn't keep the collection manager from flying off the handle.  In the recent closing example, the salesperson added their own "color" to the script, which could have had disastrous consequences. 

 

The second lesson is to trust but verify.  Audit your team, listen to what they say and how they say it, and look for opportunities to nip problems like this in the bud.  This client had been recording closings for quite some time, but my audit was the first time anyone had ever dug deeper


Reach out to Ignite at info@ignitecp.com to discuss policies, training, audits and risk assessments, and anything else you may need to keep operations running smoothly.



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