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Phone counseling cuts loan losses helps with debt

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MADISON, Wis. (10/4/10)--Offering telephone-based financial counseling has helped some credit unions reduce loan losses while helping members deal with debt, according to a new case study from CUNA Strategic Services (CSS) and Accel, a CSS provider. “Finding Hope with a Phone Call” studies the experiences of four credit unions that use phone-based services provided by Accel Members Financial Counseling:
* DuPage CU, Naperville, Ill.; * Genisys CU, Auburn Hills, Mich.; * State Employees CU (SECU) of Maryland, Linthicum, Md.; and * Wanigas CU, Saginaw, Mich.
The case study reveals that:
* Members are desperately seeking help to deal with debt. Case-study participants say more than half of their members who contact Accel are seeking debt management plans. Other debt and budget issues account for more than one-fifth of calls. * Debt management plans pay off for credit unions. Wanigas CU has received $74,000 from members through debt management plans since 2007, when it began offering Accel services. As of mid-year, Wanigas members were making payments on another $93,069 in debt. * Linking members to help before they lose hope is crucial. Participating credit unions say telephone access is vital so members can seek help six days a week, including evenings. * Staff referrals motivate members, and account for roughly half of the calls made by DuPage and SECU members. Word-of-mouth recommendations also contribute, prompting 14% of Wanigas members’ calls to Accel. * Improving members’ financial practices helps them qualify for more services. Offering telephone-based budgeting and credit score education helps members adopt better financial practices so they can successfully apply for mortgages and other products.