3 ways ChatGPT can help and 3 ways it can harm your collections business

Now that we've gotten tired of asking ChatGPT for new dad jokes, more businesses and people are looking for ways to actually make it useful.

So let's talk about three ways ChatGPT can harm your collections business, and because we like to end on a positive note, talk about three ways it can help you out.

3 ways ChatGPT can harm your collections business

ChatGPT can't harm anything unless someone puts it to work. And in the case of threats to your business, those will come from consumers, and more specifically, disgruntled borrowers.

1. Avoid paying debt

This is obviously the biggie, right? Consumers who don't want to pay their debt now have a suite of tools at the ready to help them get out of it.

In our post about consumers getting debt advice from TikTok, we talked about a number of wacky (and a few useful) ideas folks could find there when they found themselves with an account in collections.

And now they can get even more of both from ChatGPT, including plans to try to trip up agents to find themselves a legal escape hatch. Which brings us to...

2. Generating lawsuits

Consumers already generate FDCPA and TCPA lawsuits, whether with a consumer attorney, a legal website, or on their own.

But what ChatGPT can do is simplify and amplify that process. So consumers can gather a large amount of information quickly, format it properly, and use it either to file a lawsuit (or many!) themselves or to generate letters and complaints to multiple state attorneys general and consumer agencies.

3. Flooding the zone

And to bring both of those tactics together, the main way Chat GPT can be weaponized by a motivated, if angry, consumer is in sheer volume.

Multiple lawsuits - or threats of them. Dozens of letters easily customized and submitted to officials. Hundreds of online reviews or rumors. Endless emails, texts, and letters to your agency attempting to tie up your team until you decide the debt isn't worth it. (See #1.)

But don't lose hope. Because you can also put this tool to work for you.

3 ways ChatGPT can help your collections business

1. Flooding the zone

Well, turnabout is fair play, right? In the same way consumers can use ChatGPT to quickly generate large amounts of content, so can you.

You can ask ChatGPT to personalize borrower communication, or to review and rewrite it to increase the level of empathy or make it more stern. You can use it to create a series of conversation flows for a chatbot or a text assistant, to revise agent scripts, or even generate best practices for your policies and procedures documents.

2.  Automating administrative tasks

Our CEO, Shantanu Gangal, is fond of saying this: “Anything you are doing several times a day or that you spend several hours in a month doing is something you should figure out how you can automate.”

So looking back at #1, think of all the tasks you and your team do again and again and consider how to automate them. That might be pulling in trained AI to generate call notes, or capture complaints, or automate QA and compliance audits.

3. AI take the wheel

So here we're actually going to veer away from ChatGPT to talk about AI more generally to make two points.

  1. Always, always double-check what ChatGPT produces. It's a great tool, but it is prone to what are lovingly known as "hallucinations" (aka it makes things up.)
  2. Know when to use something free and open like ChatGPT or Bard, and when to invest in a solution that does more and has more guard rails in place. That is possible - we're an AI company, but large language models (LLMs) are only one of the pieces that goes into our AI, so we can prevent hallucinations and deliver better-than-human results.

And think big. You can use AI to do more than you think. In addition to basic task automation, you can get insights you didn't know were possible to keep up-to-date on your borrowers' financial lives long before their credit scores update.

Focus on the positive

It's easy to brace for the potential problems ChatGPT could deliver at your doorstep. But as attorney Heath Morgan pointed out in a recent webinar on ChatGPT in collections, it's more likely consumers are going to weild this power for good.

"If I had to pick the number one way consumers are going to use this, that would be to resolve their debt. I have a lot of faith in our consumers, that most of them from the data I see either aren't aware of that debt, or they do want to pay that debt down. So they are going to be looking for optimization and have that bot negotiate a better term for them."