GRCA Partner Sets an Example

The CBE Group, Inc. announced today that it has undergone an extensive repositioning and business reorganization that it hopes will promote positive change in not only its operations, but in the accounts receivable management industry as a whole.

The Waterloo, Iowa-based debt collector rolled out many of the trappings of a standard rebranding effort: a new corporate logo, a new tagline, and even a more robust Web site. But company officials explained that this effort goes far beyond new public-facing collateral; CBE is fundamentally altering the way it engages in debt collection.

CBE’s new tagline – Defining the Future of Debt Collection™ -- is being used not only to clarify the company’s new mission, but to serve as an example for the entire debt collection industry.

“In light of the current public and political climate within the collection industry, we believe CBE, and every collection agency, must change the way it operates to adapt to a new environment and, more importantly, because it is the right thing to do,” said Thomas R. Penaluna, CBE’s President, CEO and sole owner since 1986.

Scott Blanchard, Executive Vice President and Chief Operating Officer, echoed the desire to inflect industry-wide change. “One of the goals of the company is to not follow the pack, but to lead it,” he said. “We cannot control the actions of our competitors, but we can set an example.”

Blanchard explained that the company is focusing on the actions of its more than 800 collection employees. CBE rolled out an internal tagline for all of its collectors, “The Future of Debt Collection Starts with Me. ™” Again, the company is using more than just words to change the habits of its collectors. Along with a very strict zero-tolerance policy for complaints, collectors will be additionally incented to conduct “clean” calls with consumers. Collection managers will use advanced technology, like voice analytics, to identify good and bad calls for training purposes.

Company officials noted that even the language they use internally to discuss work is changing. “We are moving away from calling people ‘debtors’,” said Samantha Deines, Vice President, Organizational Development. “We are now referring to them as ‘consumers’ around the office.” Deines noted that an important organizational theme is to reach out a hand to consumers. CBE’s new Web site features a section designed especially for consumers, complete with education materials, personal finance calculators, and even a guide for filing a dispute under the Fair Credit Reporting Act (FCRA).

Blanchard said that while clients have been extremely receptive to the plan, results will still matter. “We think our results prove that you don’t have to be mean or disrespectful to collect a dollar,” he said. “You can be urgent [on a collection call] and still be professional, to allow a consumer to have their full dignity intact at the end of the call.”

Penaluna noted that this recent push is just putting a public face on CBE’s longstanding policies. Moreover, he said that the specific nature of the changes is warranted. “It’s time for specifics on how we’re going to change this industry,” he said.

CBE was formed in 1933 as a credit bureau and got into collections in the 1940s. The company sold its credit bureau operations in the late 1990s to focus entirely on collections.

The company has always strived to treat consumers in a positive way, noted Penaluna. It might have only been apparent to clients and management, but CBE earned a reputation as “the clean company” in many circles. Still, it principally operated under the radar, as do most ARM companies.

That began to change with high-profile contracts like the Department of Education debt collection order. And then CBE was thrust into the white-hot spotlight of political theater in 2006 when it was named as one of the three debt collection vendors on the IRS trial program. The company began to make their operational more overt and more public as politicians and interest groups battled over the fate of the IRS program.

After the IRS contract was terminated, CBE began a deliberate internal campaign to reorganize its operations with a focus on treating consumers fairly. Penaluna noted that the company now places similar portfolios in certain call centers and under certain management that have proven in the past to be effective. The intention is to keep collectors working the types of debt they are most comfortable working.

The campaign culminated with a road show to employees in early March. CBE executives visited each of the company’s five offices – three in Iowa and one each in Kansas City and Atlanta – to present the firm’s new public positioning. With collection management and collectors onboard, Penaluna hopes that the new language will serve as a blueprint for the rest of the ARM industry.

“We’re leaders on many of the competitive contracts we are currently on,” said Penaluna. “If we continue to perform as well as any other company, the rest of the industry will take note of our focus.”