Toyota TFS Wins 2015 FICO Decision Management Award for Debt Management Program

January 21st, 2016 by

Debt Management Program

The Great Recession created a wide-spread fiscal plague with massive implications on the world markets, the global economy, and the livelihood of millions of individuals. Automakers like Toyota were forced to come up with new ways of doing business in order to protect their companies, while helping customers keep from falling behind on their car payments. By 2009, the number of people that could no longer keep up with their car loans had jumped more than 25 percent from 2006. Toyota decided that it had to take a more strategic approach to the way it managed its collections program.

“That was the first time we ever saw 100,000 people per day behind in their car payment,” says Jim Bander, national manager for decision science at Toyota Financial Services. “Continuing to do things the way we had already done it didn’t make sense anymore.”

In the past, the company used a “one-size fits all approach” to collections – where customers in the early stages of delinquency would 1) receive a robo-call 2) be contacted by customer service and 3) then be assigned a collections agent.But toward the end of the Recession, so many people were suffering from the economic crisis, the new Toyota goal was to keep customers in their vehicles. In order to do that, Toyota Financial Services created a 3-step debt management process known as the Collections Treatment Authorization (CTO).

First, TFS employed a decision engine from global information services group, Experian.

Next, using predictive analytics, it created individualized scorecards in order to determine the risk level of each customer. Here, data points were used as a means of assessment. Once the CTO program was in effect, TFS utilized FICO Xpress Optimization Suite and FICO Model Builder to incorporate statistical modeling, forecasting, predictive modeling and optimization in one to quickly create different scenarios in order to come up with the most appropriate response.

From what Elmhurst Toyota knows, the new methodology provided the company with the ability to determine when they needed to take action and how each customer would respond. What the FICO solution did was offer collections managers a range of options that they could choose from in order to help expedite the collections process and come up with an equitable solution.

Not only was TFS able to help 6,000 customers avoid repossession and another 50,000 avoid delinquency, the company actually grew its portfolio by 9 percent. And due to the success of the CTO program, last year, TFS was presented with the 2015 FICO Decision Management Award for debt management.

What impressed the judges of the FICO award, as well as those of here atElmhurst Toyota, was the way TFS aligned the new program with its corporate customer service philosophy: continuous improvement and respect people.

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