The Challenge of Bi-Lingual Debt Collection

With the 2000 census, Hispanics became the largest minority group in the United States, representing over 40 million people as of 2004.  They’re also accounting for a larger piece of the consumer pie chart: Hispanic families carrying credit cards grew from 43 percent to 53 percent between 1992 and 2001. So did the average credit card debt, which increased 20 percent over that same period.

Unpaid bills aren’t unique to any segment of the population, and although the data is not terribly conclusive, Hispanic debtors default at about the same rate as the rest of the population.  But collecting from Hispanic debtors can prove challenging for agencies who don’t utilize bilingual collectors. 

The majority of agencies are run by English-speaking management, with a predominantly English-speaking cadre of collectors; a significant portion of the Hispanic population in this country speaks English as a second language, and the intricacies of a financial discussion over the phone can often lead to misunderstandings and frustration all around.

“Having bi-lingual collectors on staff – at least, as far as my operation goes – is entirely necessary,” said Juan Blanco, who heads up International Risk Management, a call center in Guadalajara, Mexico.  The location allows Blanco to service Mexico-originated debt, and also provides a perfect platform to collect on Hispanic debt that originates in the United States.  “Our location demands a bi-lingual approach.  It may not be the same in other parts of the country.”

Hispanic populations are strongly concentrated in California and the Southwest – Arizona, Texas, New Mexico.  However, due to the nature of call centers and the types of debt being collected, agencies anywhere could find themselves with significant portions of Hispanic debt to collect.

While Hispanics were long believed to be credit-averse, that isn’t as necessarily true any longer.  Hispanic debt makes up a considerable percentage of cell phone and utility bills.  Bank of America, followed shortly by Wells Fargo, is introducing a credit card that is directed primarily at Hispanic customers.  As Hispanics make up more of the population demographics of the United States, they will also make up more of the debt in consumer portfolios that are bought and sold and sent out for collection.

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Bi-lingual collectors aren’t yet a significant segment of the job pool for collection agencies.  Agencies in the Southwest fare better, with a larger concentration of Spanish speakers to choose from.  Agencies in the rest of the country, however, have a harder time.  Most Americans are mono-lingual, making searches for bi-lingual collectors tougher.  Additionally, most agencies aren’t seeing any great profit loss by not going after more Hispanic debt.

Interestingly enough, however, several agencies contacted for this article mentioned that they had a much higher retention rate with their bi-lingual collectors than they had with collectors who only spoke English.  Some of that may be attributed to higher compensation (though not all agencies paid bi-lingual collectors more); a different agency owner, asking to remain anonymous, believes that several factors, including higher success rates from Hispanic debtors coupled with lowered expectations concerning numbers (for his operation, his two bi-lingual collectors are primarily responsible for servicing Hispanic debt, and not as responsible for maintaining English-speaking numbers), makes retaining his bi-lingual employee easier.

Many agencies simply don’t have the infrastructure in place to support bi-lingual collectors.  Bi-lingual collectors also need bi-lingual managers in place.  Much like English-speaking collectors, bi-lingual collectors need to be monitored to make sure they are FDCPA-compliant.  When dealing with debtors who do not speak or understand English, this can be a land-mine of litigation opportunity in the hands of an unskilled collector.  Some agencies are simply too small; they are family-run shops without the funds available to pay for bi-lingual collectors and the subsequent management support.

For agencies who are considering pursuing Hispanic debtors, there are translating services out there – and some are even focused specifically on the debt collection industry.  HCS offers translation services for both first-party and third-party collections.  Translators are assigned to specific HCS clients in order in order to ensure high levels of client-specific training and compliance.

Spanish is the primary bi-lingual language in this country at the moment, though not the only other language spoken in the United States.  Mandarin, Vietnamese, and Arabic also topped the list of languages other than English spoken in this country.  If current marketing campaigns to the Hispanic community continue to be successful, it is likely that subsequent marketing efforts will be directed towards other non-English speaking segments of the community, offering additional opportunities for debt collectors – however, these agencies are going to need to develop plans for communicating with and collecting from non-English speaking debtors.