Can games help people who have a lot of bad debt get back on track? Encore Capital and Payoff.com will find out.
Encore Capital, which purchases consumer debt, is partnering with Payoff.com, a personalized finance motivation company, to provide elements of gaming and goal setting to help distressed consumers improve their financial health. The partnership brings together the efforts of a number of entities that purchase, collect and study consumer debt.
Encore has also created the Consumer Credit Research Institute, a collaboration with academia that uses tools from psychology, economics and neuroscience to study how consumers make financial decisions.
Results from the Consumer Credit Research Institute’s first field study, comparing prime and subprime consumers across a large number of psychological and demographic factors, were presented at the 2012 annual conference of the Society for Judgment and Decision Making in Minneapolis, MN. We selected five measurement domains for our study: demographics, attitudes, cognitive abilities, personality traits, and risk and time preferences.
In contrast to previous studies, which have generally relied on populations of convenience, our data were collected in the field from adult Americans. Test cells were balanced across self-reported financial situation, gender, and age, and full credit reports were obtained for each participant.
Results presented at the conference include the findings that subprime consumers, relative to prime consumers, exhibit less financial knowledge, more myopic spending attitudes, and more present-biased risk behavior.
This work was conducted in collaboration with the UCLA Anderson School of Management.
Millions of U.S. households continue to be challenged by chronic and mounting debt, a problem likely rooted in specific psychological factors. To better understand these factors, we conducted a series of behavioral experiments that quantified differences between prime and subprime consumers (including cognition, preferences, and temperament).
Through novel research, we endeavor to improve the ways in which we communicate with consumers and discover new ways to promote their financial recovery. We describe several implications for business strategy, specifically in the context of marketing and call center operations, and provide direction for future applied research.
Slides presented during the company’s 2012 Annual Investor Day that describe Encore’s analytic evolution and the novel role played by the Consumer Credit Research Institute (CCRI). Specific details about external partnerships and the CCRI’s research pipeline are included.
The debt collection industry has entered a maturational phase that now allows for material investment in research and development focused on better understanding the behaviors, attitudes, and choices of financially distressed consumers. Deepening knowledge of this growing and important demographic segment is pushing debt collection engagement strategies beyond traditional methods to include innovations that augment consumers’ efforts to achieve financial recovery. This focus of this session is to explore applied research activities, potential product innovations, and the evolving consumer experience.
More than 360 people joined us for a discussion of the Borrow Less Tomorrow (BoLT) Program, a behavioral approach to helping low- and moderate-income individuals and families pay down expensive debt. Using principles of behavioral economics, the BoLT Program helps consumers devise a repayment schedule and incorporates the use of peer support and reminders so that consumers both successfully pay down their debt and improve their credit scores. Developed by Innovations for Poverty Action (IPA), the BoLT Program has been implemented through several organizations including Encore Capital Group. Presenters discussed the implementation and results of the program.