Going Cardless – Anne Rosso

October 8, 2014

More than 30 years ago, ACA members debated whether to abandon their workcards in favor of computers

the 1980s, as computers became increasingly popular, credit and collection industry members heatedly debated the pros and cons of “going cardless”—abandoning their account workcards and putting a computer on each collector’s desk. Some agencies said they would never give up their paper card files and trust the vagaries of unseen records on a computer, while others believed computerized offices were an inevitable evolution. Making such a major change was difficult and expensive, and ACA International members were understandably cautious.

When mulling the change, collection agencies had to consider the options in the marketplace and what functions they wanted computerized in addition to their collection files, such as mailing labels, payroll, accounting, payment posting and management reports. They had to learn confusing new terms as well, such as “hardware,” “systems software” and “applications software.”

Many issues of Collector in the early1980s were devoted to the topic of computers: what they were, how they worked, what ACA members thought of them and how they fit into the credit and collection industry.

In fact, the entire May 1983 issue of Collector focused on the cardless debate,including several editorials written by members who had tried incorporating computers into their agencies.

Instituting a computer system in a collection agency that had previously worked solely from a filing cabinet meant placing a computer terminal on each collector’s desk for the first time.Typists keyed account information into a central computer, and collectors—many of whom had little to no experience with computers at all—brought up accounts to be worked one at a time.

“Telephone collectors may feel they are losing control over their accounts if they don’t have the actual paper workcards on their desks,” Tom Cooper wrote in the article, “The Cardless System—Boon or Boondoggle?” “They may resent the fact that management can measure their productivity electronically,adding a ‘big brother’ element to their jobs.”

Cooper also noted, “Researchers have documented instances in which telephone collectors, out of frustration or fear that their jobs are being threatened, have actively worked at bringing down or sabotaging the computer.”

Many agencies were concerned that collectors would be too distracted by the new technology to focus on their accounts. In the article, “Cardless—A Boondoggle That’s Filled with Flaws,” 1982/83 ACA President Charles Maclean addressed the downside of giving collectors direct computer access to their accounts.

“The biggest disappointment in a cardless conversion,” Maclean noted, “is when the anticipated increase in productivity doesn’t materialize. One reason for this may be that when you’re cardless, you’ve turned your collectors into clerks.”

Maclean speculated that computers can pose too much of a temptation for collectors—enticing them to fritter away their days scrolling through data,imputing remarks and cherry-picking their favorite accounts.

“Putting a [computer terminal] on desks of collectors may put you back where you were when you took their typewriters off their desks years ago,”noted Glen Ruddy, an ACA member in Visalia, Calif., who converted his agency to cardless for a brief period of time.

ACA member Kent Green of Ogden,Utah, also experienced poor results when his agency initially tried out a computer system.

“Productivity of the agency’s most valuable assets, the collectors, drops drastically,” he said. “They now use a minimum of 25 percent of their time to be data entry operators. It’s difficult enough finding and keeping good collectors, let alone adding the qualification of being good typists.”

However, in a letter to the editor in the September 1983 issue of Collector,ACA member William Bland from North Kansas City, Mo., wrote that his agency has recently converted to a computer system, calling it “a revolution.”

He noted, “There are always individuals who cannot make the transition to a total cardless system, however, and they must be replaced or they leave of their own choice. These I call ‘computer casualties.’ But they are really few and far between. Most people accept this transition very well and are fascinated with how much easier this makes their work. In my opinion, in order to keep up with the requirements of today’s credit grantors, computerization—to some degree—is a must.”

Many agency owners also worried about the reliability of computer systems. For instance, what happens if there’s a breakdown in the system?

“There’s nothing for anyone to do but go home,” Ruddy said. “And unless the data being processed has been backed up, you risk losing it permanently.”

Collection agencies investing in computer systems for the first time were limited by the hardware and software that was available, as well as by the amount of time and money agencies had to commit to a system. Green estimated that the minimum cost for a computer system would be approximately $1,800 per month, based on a five-year payout.

“The average ACA member who has nine or fewer employees could rarely justify this kind of outlay,” Green said.

The benefits of computerizing the collection office sounded good: there would be no more workcards to lose— instead, collectors would be able to simply touch a key to pull up an account to work. But committing to this new system was difficult, and some ACA members chose to ease into the process slowly.

“The only advantage to a cardless system is that you don’t have to file and locate workcards,” Green said. “I think the best system is one that allows the agency to produce a card or go cardless on an individual debtor basis. For example, if the account is pre-collect, no card is needed. When the account goes to a collector, generate a workcard.”

Several ACA members noted that computer systems had drastically reduced paperwork problems and increased efficiency in their agencies. In the article “Cardless—A Boon, the Best Step We’ve Ever Taken,” Ruth Mitchell of St. Charles, Mo., listed dozens of ways computers have helped her agency, including:

  • Client statement, month-end checks, collector status reports and other such items could be completed in one day.
  • Accounts could be set up to be worked on a certain date.
  • No need to decipher handwriting on account workcards.

While ACA member George Fooshee of Witchita, Kan., echoed Mitchell’s sentiment in a 1983 Collector article, he also noted that the conversion was not entirely painless. In fact, he described his experiences working toward becoming cardless as “the most exciting, frustrating and challenging years of my business career.”

For Fooshee, the benefits of the computer system included instant access to information, improved client service and personnel reduction. He pointed out how proud he was of his collectors—who endured and excelled at a computer training program the likes of which they had never before seen—and of his company, which was now firmly positioned at the forefront of the technology era.

“The ’80s are the computer age, and any collector who shuffles paper is going to be in a poor profit and competitive position,” Fooshee said. “Any manager who does not learn to use a computer is going to be as out of it as one who never saw a television program. The computer business and the collection business go together.”

A June 1983 Collector article by Howard Wheeler of Topeka, Kan., noted that Wheeler’s computer system had increased his agency’s income without a proportionate increase in expenses, and was more profitable than his old workcard system.

“The software that we developed, written in RPG II computer language for the IBM System/34, evolved during a period of four years,” he said. “The system was specifically designed to increase the potential productivity of every employee, to increase job satisfaction and the income of every employee, and to eliminate as nearly as possible those tasks and procedures that were boring, repetitive and frustrating.”

Wheeler said that in the two and a half years his agency had been using the computer system, it had doubled its income, very substantially increased its profits and drastically reduced its overhead.

“The cardless environment will not make a good collector out of a mediocre one, but it will make an excellent collector out of a good one,” Wheler said. cm


Anne Rosso is interim editor of Collector. As part of ACA International’s 75th anniversary, Collector is looking back at some of the moments that helped shape the association.  This article can be viewed online.

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