Debit and Credit Cards

[jdeasy]

Let's think about for a moment.

If DirectExpress persistence was as equally as strong as checking/saving account persistence, then why are virtually all the large final expense players either (a) allowing as-earned or a small advance, or (b) dialing down their plastic business to as-earned only?

You're experience is an anomaly. In fact, if your statement was typical for all final expense, we would be seeing carriers dial down advances on checking/savings accounts.

Remember a year or so ago when Travis said DE users are one notch above homelessness? I originally scoffed at the proposition, but now I know well enough that he was right on the money.

There's a reason people opt for an account without access to checks; it's because they're to dull to manage a bank account, or worse, they owe a bank money and refuse to pay it back. But since they have to have an account to deposit government checks, the DE card is the logical choice.

All of the above behavior patterns of a typical DE user leads me to believe why they tend to lapse and miss payment more often. Basically, being that they suck so bad with money that they cannot manage a checking account, why - on average - would they be more persistent in their business?

FYI: I asked SNL what their plastic persistency was; they said around 50% as of 6 months ago.

Well SNL is screwed up about how they run the business. I was told by an agent this week that they didn't give him advance notice that a person's DE card was expiring. Trinity send the agent and the client a notice a month before expiring.

I had problems with DE business with 1 Star too. But not anymore than with checking or savings accounts with them. Why? Because their billing and accounting dept is screwed up.

You ask why aren't more companies going to DE cards? Because they don't understand this business, that's why.

And because it costs more to process DE business than checking account business. I may be off on the numbers a little but Alvin at Trinity told me it costs less than 10 cents to process checking account debits. It costs around a dollar to process DE debits.

Then you have the companies that can't process drafts on the day that people get paid. That's the biggest issue. If a company can''t take money on the very day that people get paid then they should not ever get into the DE business.

Again back to Trinity, Alvin told me that did a study on the DE business vs the regular payment options. He said there was not any real difference in persistency between the models.

So I'm not such an anomaly after all. Not with a company that knows what they are doing.

 

[Rearden]

John, when you admit the carrier is in a race to beat the prospect to the ATM to take their money before you, you're virtually conceding that DE clients lower quality than checking account clients.

Morover, if Trinity does a measurably better job collecting DE payments than 5Star, and your experience is not an anomaly, then why isn't Trinity advancing on DE business?

 

[HoosierLife]

John, when you admit the carrier is in a race to beat the prospect to the ATM to take their money before you, you're virtually conceding that DE clients lower quality than checking account clients.

Morover, if Trinity does a measurably better job collecting DE payments than 5Star, and your experience is not an anomaly, then why isn't Trinity advancing on DE business?

Alvin said they might in the future. He said he was much easier/smoother to add advances later on, than to take them away.

I agree with both of you, but Trinity is the only company that is doing this right IMO. As long as we can get the money before Gertrude does, DE business will be golden!

 

[goillini52]

Lol!
It's from Beavis and Butthead.
That is my new user name. Looking to switch over and didnt realize my laptop was still logged in as Beavis. It'll make more sense when I load an avatar.

I figured that, I used to watch it with my kids.

 

[jdeasy]

John, when you admit the carrier is in a race to beat the prospect to the ATM to take their money before you, you're virtually conceding that DE clients lower quality than checking account clients.

Morover, if Trinity does a measurably better job collecting DE payments than 5Star, and your experience is not an anomaly, then why isn't Trinity advancing on DE business?

Can't answer that question. I've not had the advance discussion with them. Except to remove me from advancing when I was put on advancing with them in error.

It's always a race to the bank with our market. Not moreso just because of DE.

I just had an RNA NSF that I had to get fixed. Her draft was supposed to be the 2nd. She was in the bank and took out all her money that was left. The RNA draft had not gone through on the proper day and was NSF>

This was a checking account. Would have been the same story if it was DE or any other mode.

If RNA starts taking DE cards and don't draft on the proper date then they will have issues. Just watch what happens with Trans now.

What's the line in the popular song out now by Bruno Mars?
"Don't believe me just watch!!"

 

[Rearden]

I will agree with you in as much as the carrier needs to beat the client to the bank no matter the account type.

But prospects having DE cards have them and not bank accounts for a reason. And normally it's because they are more often than not deadbeats that can't manage their bills and bank drafts.

If the DE users were equally as shrewd as bank account users, don't you think DirectExpress would simply allow direct checking account drafts from the underlying account number?

There is a reason why they don't...

 

[jdeasy]

I will agree with you in as much as the carrier needs to beat the client to the bank no matter the account type.

But prospects having DE cards have them and not bank accounts for a reason. And normally it's because they are more often than not deadbeats that can't manage their bills and bank drafts.

If the DE users were equally as shrewd as bank account users, don't you think DirectExpress would simply allow direct checking account drafts from the underlying account number?

There is a reason why they don't...

I'm not following your reasoning there. Yeah, there's usually a reason. But the money is put there on a certain day. Draft that day and the company gets paid. It's actually harder for a person to stop the drafts from their DE card than from a bank. But it can be done and they will get it done if they want the draft stopped.

But they would have stopped that with any mode if they didn't want the insurance.

So, to me, it all goes back to basics. If they want the insurance they will keep it. If they don't, they won't. Regardless of whether it comes from a checking account, a savings account, the DE card or direct bill.

I had the same persistency with direct bill as with drafts too. If they want the insurance they will find a way to keep it.