In previous editions of AR Gone Wrong, I introduced and coined the term “Collection Loops.” A Collection Loop is what happens when a company outsources a portion of their “straightforward and simple” collections to another firm. The company provides limited information that basically includes the amount of money to collect, when it was due, who to collect it from and systems that are designed to assure that the debtors are Dunned efficiently. Part of this efficient collection process is to assure that no one falls through the cracks. They receive a call, letter or email every couple of days until the pay.
In the two previous real-life examples of AR Management gone badly, the Collection Loops were easily broken via one fax to the loop creator’s CEO.
Cforia changed from a traditional telecomm provider to VOIP during September 2009. This technology upgrade was a part of our European Sales and Support Office opening. VOIP allows our European Office to easily communicate with everyone else in the company. All Cforia employees are a simple 4-digit telephone extension away from each other. I always have problems with do I need to dial a 9 first and then 011, or is that + first.
In preparation for this technology change-over, we built out the new telecomm facility and started running it in parallel a month and a half before the anniversary date of our contract with the traditional telecomm provider. Parallel systems allow verification that everything is working correctly before pulling the plug on the old provider.
On July 16th, 2009, we contacted our old telecomm supplier to inquire about providing notice that we did not intend to continue our plan through auto renewal on the forth coming anniversary date, September 23. Their call center suggested that we call them 30 days before the 23rd to “formally” let them know that we are terminating their service.
On August the 23rd, I contacted their call center and gave them verbal notice that Cforia is electing to terminate their service effective September 23rd. As a safeguard for Cforia, I asked the call center for their fax number so that I could document that we had given appropriate notice.
Since September, Cforia has received three monthly bills for continuation of service, even though we have stop using them and had requested termination. During November we starting receiving threatening disconnection notices for non-payment. Our AP department tried calling their Call Center and were told that they could not shut off the billing.
Our former telecomm provider has taken the concept of Collection Loops to a whole new level. They have managed to setup a “Billing and Collection Loop.”
During January, Cforia AP placed the latest threatening bill on my desk with a sticky note that asked me go after them with my standard CEO notification process. My standard CEO process consists of faxing a company CEO that seems to be stuck in a loop the details. Funny how someone who reports to the CEO is able to break through corporate bureacracy and fix problems quickly.
This particular telecomm company seems to have a fairly open door to the CEO. I actually reached his voicemail on the first call, told him that I was faxing him a one page letter that describes the delimma his company has placed us in. Surprising, my call and fax were not responded to over a five day period. I personally have been using my CEO Process for around 25 years, and five days is easily the all time slow response.
After five days, I called and got through to the CEO’s Admin. She told me that it had taken a couple of days for the fax to get to the CEO and that she had routed the problem to a corporate troubleshooter who was assigned to fix the problem. I was forwarded and handed off to the “Troubleshooter”. She was able to go on line and see a July 16th note that said Cforia wanted to terminate at the end of term. She assured me that the bill would be written off and that we would not be bothered further. “It should only take a couple of days.” I asked for an email confirmation when she was sure everythign was taken care of.
Of course I never received that confirmation email, and right now I am pondering whether I should have punctuated that quotation with a period or a question mark. Last week Cforia received the nastiest Dunning notice yet, “Because you have not paid your bill for several months, we are going to disconnect your service and since you have breached your contract, you owe us a year’s service fee.”
Cforia is just fine with them disconnecting our service, especially since we stopped using them almost five months ago. The part we disagree with is that we do not want them placing adverse comments in our credit records.
On Tuesday, February 23rd, Cforia in honor of Hugs and Kisses Communications is presenting a webinar on Outsourcer, Shared Services and BPO Best Practices. You can register at the link below.
http://www.cforia.com/contact_forms/outsourcer_shared_services_and_BPO_best_practices_webinar.html
This should be a really fun webinar that dissects some really crazy worst practices that are unfortunately much too common. Much to my surprise, I have received more feedback from people who work at Cforia than any other webinar that we have ever done. Comments like, Sounds Interesting! This is totally new stuff. How dare you put something so controversial out there for everyone to see.
I would love seeing any comments about others who have found themselves trapped in a “Collections Loop”.
