“Why Do We Make It Adversarial?” Rethinking Debt Collection

Debt collection doesn’t have to mean fear and shame. Gwyneth Borden, Remynt’s founder and CEO, joins Mary to explore a friendlier way for financial institutions to collect debt. Among the newer approaches: offering financial therapy, building credit while paying down debt and turning delinquency into long-term loyalty.

Show notes:

• Remynt

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Chapters:
[0:00] Intro – Meet Gwyneth Borden of Remynt
[0:31] The Mission to Rethink Debt Collection
[2:05] Why Fear and Shame Don’t Work
[5:30] Gwyneth’s Personal Debt Story
[7:19] Why Debt Collection Is Stuck in the Past
[9:42] Building Credit While Paying Off Debt
[14:00] The Psychology of Money & Financial Therapy
[22:15] How the Industry Mislabels People in Debt
[27:55] Gen Z and the Debt Crisis
[30:18] The Future of Credit Recovery

Transcript

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00:00:08:18 - 00:00:31:07
 Mary
 Welcome to money is isn't everything. I'm Mary Wisniewski, Cornerstone Advisors editor at large and host of the show that explores early stage ideas that could, if not already, shake up financial services. On the show today is Gwyneth Borden, and she's the CEO and founder of a company called remit. I met her at the Receita summit in Michigan this year and was struck by her mission to rethink debt collections.

00:00:31:09 - 00:00:51:23
 Mary
 It's not usually the problem entrepreneurs choose. On the show today, we talk about rebranding debt collection. Her personal story of debt and remits work with credit unions to help make the repayment experience feel less shameful. Here's our convo. Gwyneth, welcome to money Isn't Everything. It's wonderful to have you on the show today.

00:00:52:01 - 00:00:58:18
 Gwyneth
 Thank you so much. I'm delighted to be on the podcast. Talking about money isn't everything in a world where money is everything?

00:00:58:19 - 00:01:20:05
 Mary
 No, it's both things. I'll tell you a little bit of the backdrop for that name. Banks and credit unions are always saying, hey, we don't want to be the dumb pipes. So I like to explore anything other than just parking the money. But also, I care a lot about financial health. But also what you just said sets us up well, for the combo we're about to do again to dig into, which is debt collection.

00:01:20:06 - 00:01:38:21
 Mary
 But, I just wanted to back up a little minute, a back up a little minute. We haven't even had a minute. So I'm just I'm just setting the stage right now, and that's like, I caught your demo at the Receita summit, which was in Michigan in September, and I was like, oh, okay. This is really interesting.

00:01:38:21 - 00:02:05:13
 Mary
 That's rethinking debt collection. Also, you're doing work with credit unions and I'll, we'll, we'll definitely explore more of that. But I wanted to start with getting to this, like rebranding debt collection. And I took a note here. And I just want to make sure I wrote it down. Right. And it's and and you're using the phrase empowering financial freedom to describe, collecting debt and I yeah, let's let's talk about, you know, what's the need for a rebranding debt collection.

00:02:05:15 - 00:02:26:11
 Gwyneth
 Yeah. I mean, I think in general, I mean, nobody wants to be in debt and no one wants to be in a situation of bad debt. Good things happen to bad people, or the good, bad things happen to good people and people find themselves behind. Maybe they lose a job. They get sick, something goes wrong, or maybe they just are a bit overspending and something happens and they kind of just are, you know, in that sort of place.

00:02:26:11 - 00:02:55:20
 Gwyneth
 But I think that, you know, debt collection has always been about fear and shame tactics. This notion of like, you're a bad person because you are in debt and fearing and fear and shame is not a good place for people to behave from. You know, money is much more complicated than just like, I make this amount of money and I spend this amount of money, or that I should save and invest, like you've asked people the basic things that they should do, and they would say, oh, I should save for a rainy day, or I have an emergency fund, I should invest in my retirement.

00:02:55:22 - 00:03:17:09
 Gwyneth
 I should, I should pay all my bills on time and not carry, high interest rate debt. People would say all those things in a sense. You can assets like a house or other real estate that I could make money off of. I should invest in the stock market. Everyone knows this, but the issue of money goes really far back to, you know, your upbringing and what you were, what we were raised with, what you were taught about money or what you weren't taught about money.

00:03:17:15 - 00:03:40:15
 Gwyneth
 People think not talking about money is a good thing, but actually but not talking about it actually is worse than them even talking about it. And so I think when we talk about debt collection, you can't not talk about the complicated relationship that people have with money. And if you're in the process of trying to extract money from people who are in financial dire straits, for whatever reason, fear and shame is not the way to do it.

00:03:40:17 - 00:04:04:04
 Gwyneth
 Do you want people to act under duress, especially if you ever want to reclaim that member or customer in the future? It isn't, nor is it the way that people best respond. So I think when people think of debt collection, it unfortunately, because of a lot of bad actors, lawsuits, litigations, threats, intimidation and things have happened. It was a very bad name and it's a highly regulated space as a consequence.

00:04:04:06 - 00:04:22:09
 Gwyneth
 But it doesn't have to be that way, right? Why do we make it adversarial? Yes. There's some people who don't want to do the right thing, but that's a really small percentage of people. Most people are really stuck in a situation that they are not sure how to get out of, and they're overwhelmed, and that is something we forget about.

00:04:22:09 - 00:04:40:20
 Gwyneth
 So, I mean, I think debt collection really is about going deep back to the human experience. There are two things that people need. They need health or money. If you're lacking one or both of those things, it's very difficult, right? And so I think that people lose sight of that in the process of debt collection and debt collection, you know, is necessary.

00:04:40:20 - 00:05:02:16
 Gwyneth
 Right? As much as I personally like, even as somebody who chose to start a company in this space, I don't love debt collection, but I love that we have financial system that lends to people and gives opportunities for people to build assets and wealth. And in order for that to happen, right, people need to pay their debts or else everyone pays for or is cannot or lending doesn't happen.

00:05:02:22 - 00:05:18:22
 Gwyneth
 And that's what happens when you have higher delinquency. So that collection, unfortunately, is a necessary evil of our financial system. And in order to make sure that people do repay their debts and people can lend to others, but it doesn't have to be a negative thing. It can be a positive thing and helping people rebuild their lives.

00:05:19:00 - 00:05:30:05
 Mary
 It's such a curious thing. You don't often hear a founder say, hey, I'm redoing, I'm redoing debt collection and so, I mean, what what pulled you into this, you know, working on solving this particular problem?

00:05:30:07 - 00:05:49:05
 Gwyneth
 Yeah. I mean, I think, you know, I had my struggles with credit and debt falling behind, not making enough money, working in high, high, costs, working in high cost areas and choosing a career that did not necessarily, support living in the places that I lived. You know, I didn't have a trust fund, from rich parents.

00:05:49:07 - 00:06:14:13
 Gwyneth
 And I think I didn't really understand, like, how to manage my money, quite frankly. And I fell behind. And I remember the fear and shame and the things that people said to me. Borrow money from your family and do all these sort of things. And, like, what if you don't have a family to borrow money from? Like how people make you so bad and you feel so much shame and you're working to fix it, and when you're in the process of fixing it, it's not like the people were particularly nice to you, but you, you get through it.

00:06:14:15 - 00:06:37:13
 Gwyneth
 And then you realized that your credit shot and it's really hard to rebuild. And the only options if you're in the credit markets are super high interest rate, predatory products that are waiting to be right there to basically trap you in the cycle of debt. So when I thought about my personal experience, how hard it was climbing out and rebuilding, and how I feel like there's a vacuum in how we do things in the United States in the sense of we do a great job of punishing people.

00:06:37:13 - 00:06:55:22
 Gwyneth
 What we do a terrible job of like preventing things from happening or helping people along the way or rehabilitating people. And so the whole idea of like helping people repay and rebuild is something that I felt was missing, something that would have benefited my experience and something I wanted to share with with others in the world. I also saw that debt collection still hasn't evolved.

00:06:56:02 - 00:07:19:16
 Gwyneth
 You know, primarily most credit unions are still having people call people on the phone about their debt in a world that no one answers the phone anymore. And so I saw an opportunity for innovation and to help credit unions because they do care about their members, they care about financial wellness, and they are really the backbone of providing financial services to populations of people that maybe larger banks would ignore.

00:07:19:18 - 00:07:41:18
 Mary
 Yeah, this is something that I think is so worth like putting an exclamation mark on. And that's just like how old school debt collection techniques have been, largely because of regulation, at least in the past, because I remember for a long time we couldn't even, like text somebody. And so to your point of it's phone calls, yeah, I can't, I just can't even imagine that experience or someone picking up or like that getting solved.

00:07:41:18 - 00:07:45:20
 Mary
 I mean, why why do you think that's still happening?

00:07:45:22 - 00:08:08:14
 Gwyneth
 Well, I think people one couple of things. I mean, if you call it enough, you might actually get the person right. And there are older, older, you know, members or consumers who do answer the phone or have landlines still. There was another a collections company that's quoted something like 13% of collection calls are ever answered. So it just gives you that the, the idea of how few people answer those calls.

00:08:08:14 - 00:08:25:20
 Gwyneth
 Our experience is that if someone answers a call and they realize who it is, they hang up. Yeah. They're not like, yeah, let's talk about this. Because the thing about it is this if someone had the money, they would be calling or paying, right? Every once in a while you might catch someone and there's, you know, in the credit environment, people do have relationships with their credit union and know the people there.

00:08:26:00 - 00:08:47:08
 Gwyneth
 And it can cut both ways. On the one hand, they may want to have a conversation with Susie because Susie doesn't really well, and they want to give their sob story. On another hand, they might feel really embarrassed to talk to Susie, and they're avoiding Susie. So I think that, you know, there's a the one two punch of the fact that there are institutions like credit unions, personal experiences with their members, and they feel like they've always connected with them that way.

00:08:47:08 - 00:09:11:23
 Gwyneth
 Why can't they connect with them now and they want to do that? I think that's part of the reason. And two, I just think that there was a study done a couple of years ago, and it's funny because it did this before opening AI and the whole explosion of AI everywhere. But there was a study done that in China that said that debt collection done with AI was inferior to debt collection done by humans because of the social pressure that humans provide in that situation.

00:09:12:04 - 00:09:34:00
 Gwyneth
 Now, that was a few years ago. That's before the launch of chat. GPT in the world, loving and falling in love with the marrying AI or whatever. So I think that the results would be different today because people do tend to prefer to engage with, AI agents than actual people, because there's no judgment there. At the end of the day, you know what we find about our platform being a self cure platform.

00:09:34:00 - 00:09:42:04
 Gwyneth
 People tell us their wages are being garnished. They tell us they have multiple loans. They tell us things that they probably wouldn't want to discuss, but they're willing to put it, you know, in a digital form.

00:09:42:06 - 00:10:06:04
 Mary
 I think that's really interesting. And then you're highlighting what sets you apart. So and I want to get a bit into like, how how you let people in debt set up, you know, different arrangements for the schedule of payment and also more on the like building the credit score, because I did not realize this until recently, actually told in your presentation, your demo of like, oh, just because you're paying off debt does not necessarily mean you're improving your credit score.

00:10:06:04 - 00:10:12:09
 Mary
 It's like a separate thing, except for certain models. So yeah. So we can start there or with like the digital payments.

00:10:12:13 - 00:10:33:05
 Gwyneth
 No, I mean, there's two levels. I mean, I think what happens is when you get into severe delinquency, a lot of it depends on the the credit union, a financial institution. Some people cut you off as early as 45 days. Some people cut you off as late as 180 days. But the point is, at some point your account is often closed.

00:10:33:05 - 00:10:52:12
 Gwyneth
 When you have, then you've met nonpayment. And nonpayment isn't just I owe $100 and I didn't pay, I and I didn't pay $100. It could be I owe $100, but I paid $50. But I still haven't paid that $100, so I'm still considered delinquent, even though I've been making a payment because I haven't satisfied at least what the amount do is.

00:10:52:12 - 00:11:09:06
 Gwyneth
 So my credit score is actually showing every month in a negative fashion that I am. If it's so being reported right that I am actually still delinquent. So once you get to a certain point where your account is closed, there's no way to build credit on that account because that's a close account. Credit scores are based on open accounts and utilization.

00:11:09:08 - 00:11:33:14
 Gwyneth
 And most people who get into the collection stage, especially the late stage and the charge off stage, those accounts are no longer open. So repaying the debt won't rebuild their credit score in any way. And in fact, a lot of like third party debt collectors actually open a debt collection trade line, which is super negative on your credit report, to show that you have debt and so because everyone knows now people like Google it, they're on TikTok.

00:11:33:14 - 00:12:04:09
 Gwyneth
 Everyone knows that repaying has too bad debt, won't rebuild their credit score. It really it really decreases the incentive to do so. Right? People would rather look elsewhere, whether it's debt settlement or credit repair. Look elsewhere for building that. And so we felt like, listen, why not enable people to build credit in that process? Because the number one thing before we got started, when we would survey people in this situation with charts off that, specifically, the number one reason people said that they would be repay their debt is to rebuild their credit.

00:12:04:14 - 00:12:25:22
 Gwyneth
 Right? Because that's the one thing that you need. Your credit score is like a report card that follows you throughout your entire life. And if you ever want to borrow for any reason, or get an apartment, or get a car or even car insurance, you know, credit score is really matter. And what often happens is the people who afford can afford least pay the most because credit scores, because they have a lower credit score, right?

00:12:25:22 - 00:12:39:19
 Gwyneth
 To be the credit score that you have determines how large of an interest rate you're going to pay on a home, on a car. I mean, I didn't even realize until I started doing this work that you can get a 29% interest rate on a car loan, which is absolutely absurd.

00:12:39:21 - 00:12:41:00
 Mary
 Oh, yeah.

00:12:41:02 - 00:12:56:20
 Gwyneth
 I know it's crazy. And the model actuarial models have figured out that most of those people are going to default, but because they charge them so much interest, they make their money anyway. It's really bad for the customer, really bad for the member. But, I mean, credit unions don't do that because they've capped interest rates, but other other lenders do.

00:12:56:22 - 00:13:19:12
 Gwyneth
 And the other thing that's changed in our world today is that there is such a proliferation of online lenders. There's never been an easier time to get a same day loan online. Has there ever has been and for non credit union lenders there's a the people know how to get around the usury interest rates right there. Interest rates that vary for usury.

00:13:19:12 - 00:13:42:03
 Gwyneth
 Usually payday loans have a certain cap because they're payday loans. And then larger loans have a certain cap. But there's this sweet spot between like 750 and about $1,999 that usually there isn't a cap. And so you can see people giving loans for 700%, 800%, 900% interest rate. And for people who need who don't have an emergency fund, right.

00:13:42:08 - 00:14:00:06
 Gwyneth
 And they need to fix their car to day to get to work, but they can find this lender that will give them the money they need the same day. They will often sign up for these products, not realizing that they're going to pay six times, ten times whatever they borrowed, right, to get that money. But they have an imminent need that they can't, that they need.

00:14:00:06 - 00:14:24:13
 Gwyneth
 They they need to address. And so that is, you know, that is the thing around you get a credit because most people have bad credit, right? So they also have no other choices but to take those loans. And so that's why the credit building is so important. Because when people have poor scores, when they do have borrowing needs, their only options are to use more predatory needs, which only gives them a deeper guess, some deeper in debt and worse off rather than better off.

00:14:24:15 - 00:14:41:13
 Mary
 At the top of the call you were mentioning, you know, like people are dealing with shame often, tied to debt collection. And I guess it's kind of getting me curious of like, what is like your first interaction with someone that that you're hoping to collect debt from? What? What's the tone? What's the voice? What is it? Yeah.

00:14:41:13 - 00:14:42:20
 Mary
 What does it resemble?

00:14:42:22 - 00:14:59:22
 Gwyneth
 So we are like, you know, we are your trusted partner and we want to help you achieve financial freedom. So our introduction is like, hey, you're lucky because we're working with your creditor or credit union X, Y, Z to work with for lent. And what we're meant is different because you can repay and rebuild. We have all these great benefits, personal financial management tools.

00:15:00:00 - 00:15:21:19
 Gwyneth
 You a financial therapist calls. We actually have, you know, the ability to set your own custom payment plan based upon your own payment capability. You can indicate a hardship the whole idea is that we want to enable people and we we talk about how we're enabling you to get on your path of financial freedom by making it easy for you to take that first step.

00:15:21:21 - 00:15:39:06
 Gwyneth
 We know that you best understand your financial situation. So when someone else tries to tell you that you need to pay $100 a month or whatever, they don't know. They don't know about all your expenses. Not every expense is on a credit report. If you're paying for childcare or private school, those even our health care things, they don't always show up in your credit report.

00:15:39:06 - 00:15:58:01
 Gwyneth
 So nobody really knows what your expenses are. And so to give agency back to the the consumer or the member, that's what we communicate. And that first correspondence and where, you know, it's really amazing is that we actually get thumbs up and positive responses from people. Because generally when someone has one debt in arrears, they have multiple. That's in arrears.

00:15:58:01 - 00:16:24:06
 Gwyneth
 It's usually not just one, right? Especially at the later a few months in stage. And so people know what other people are saying or how they're treating them, and they're so happy to hear from us. Our content is full of financial literacy, personalization, some sort of fun and irreverent stuff, and then memes and all the rest. We're trying to educate people, but also meet them where they are and and really try to take in consideration of what their what they're thinking about.

00:16:24:06 - 00:16:44:10
 Gwyneth
 Because nobody getting out of debt isn't the activity everyone's excited to do, it's what that getting out of debt gets them to. Is it a new or is it going back to school? Is it buying a house? Is it being able to invest? It is a means to an end. People get out of a debt for a reason, and it's usually to do to move to another stage in their life.

00:16:44:12 - 00:16:58:09
 Gwyneth
 And so we're really talking about that. Where is it that you want to be that getting out of debt will get you two right? It's not about just the immediacy of that because, you know, let's face it, if you get a mortgage, you know you're going to be in debt for a good portion of your life if you're student loans.

00:16:58:13 - 00:17:21:19
 Gwyneth
 So, you know, not all debt is bad and not all that needs to be resolved immediately. High interest rate that absolutely should and needs to be. But those other kinds of debt are things that we we live with and we acknowledge can help us in our wealth building journey. So for us, it's really about acknowledging that there's the good debt that you want to acquire to help, you know, grow your wealth and opportunities, the bad debt that you need to resolve so that you can get there.

00:17:21:21 - 00:17:45:17
 Mary
 But if you said the magic words financial therapist and I just I found out about that if I get to therapy, I'd say maybe a year or two ago. And I believe Cash App like hired someone to be like their financial therapist. But I'd still say it's a really underplayed area of financial technology products. But I'm really fascinated by it because it's also sort of like an acknowledgment of mental health and money issues often interacting.

00:17:45:17 - 00:17:52:07
 Mary
 So tell me about how are using financial therapists. Are people using them? What? Yeah, just tell me more about it.

00:17:52:10 - 00:18:15:20
 Gwyneth
 We have a financial therapist will join us for calls them or offer opportunities for special sessions like, you know, dealing with unemployment and how to do that and all those sort of workshops. And we'll actually, you know, pay for quote unquote, our, our, consumers to go and take advantage of. But it's this acknowledgment that, you know, money really is very personal, and it has more to do with your psychological emotional.

00:18:15:20 - 00:18:51:15
 Gwyneth
 That's right. And we all are about safety and security. All humans, all of our actions are about protecting that. And how we utilize money sometimes has to do with our fear of not belonging or fear of being isolated or left alone. You know, there's a lot of things associated with money. Sometimes that the way your parents thought about or didn't fight about or spent it or didn't spend it, all of those things leave an imprint from a very early age on us and what we think about money and money again, how we behave with money sometimes is symptomatic of other, psychological emotional issues and less to do with money itself.

00:18:51:15 - 00:19:12:00
 Gwyneth
 Right. And so that whole acknowledgment that you can't, you can't just tell someone to make a budget, and expect that to be that, to work for them. Right. There are triggers in your life of things that happen that make you behave a certain way. Sometimes. Sometimes the trigger is feeling left out. Everyone's going to the Taylor Swift concert.

00:19:12:00 - 00:19:29:05
 Gwyneth
 You don't have any money, so you take out a buy now, pay later loan because you don't want to miss out. All your friends are going to be posting on social media and doing that. That's their fear of safety and not fitting in that you're carrying them out. Or maybe when you are, when you're upset, do you feel like you buy something as a financial reward to make yourself feel better?

00:19:29:05 - 00:19:40:04
 Gwyneth
 So all of these things are very much, you know, there's been a lot of, research talking about, for example, when you swipe a credit card or set on credit card, there's like a dopamine hit that. Yeah, people affect that.

00:19:40:05 - 00:19:44:17
 Mary
 I feel it, I feel it. I can say for myself.

00:19:44:19 - 00:20:06:07
 Gwyneth
 So we can't divorce money from emotions. And, and it's very complex. And so when you know that and you acknowledge that and you try to work on how do people deal with that to know what their triggers are, what is the thing that might make you spend money on a vacation you can't afford or concert you can't afford, or an outfit that you can't afford?

00:20:06:09 - 00:20:25:01
 Gwyneth
 What might what things might make you try to control people with using money, or providing it, or not providing it. There's all of those things. And so I think we want to think of it, money is so personal. And I think that in the debt collection process before people forget about that. Right. It's not just the simple like okay I have this, I don't have this.

00:20:25:01 - 00:20:44:13
 Gwyneth
 It's not a, you know, it's not an inanimate object. It's actually how we all live. Right. You know, having money can be great. And I in terrible and not having money can be great. But there's lots of research to talk about that. But financial therapy really is about getting to the heart of those issues, because what you might need to fix isn't just how much money you make, but how you think about your money.

00:20:44:13 - 00:21:04:14
 Gwyneth
 That's why so many people who, for example, there's, you know, debt consolidation loans. Most people who get a debt consolidation loan end up in just as much debt 18 months later. And these are not people in severe delinquency. These people are good credit scores that just happened to accumulate a lot of debt. They get a debt consolidation loan to pay off that debt and pay off all their credit cards.

00:21:04:14 - 00:21:23:19
 Gwyneth
 And then the next thing you know, usually, like I said, a year later, they have just as much debt. They start using their credit cards all over again. Right. And it's sort of like this, this constant thing of spending and right now, as the cracks are showing, people across all socioeconomic backgrounds are living paycheck to paycheck. We live in a world where everything is subscription.

00:21:23:19 - 00:21:49:18
 Gwyneth
 Everything's more expensive. Our standard of living has increased what we consider to be convenient and unnecessary. It's costing us a lot more than those necessities used to. And so we've had lifestyle creep. Part of it's psychological. It is actually financial. Things do cost more, but there's a psychological component that you can't ignore. And granite, we're not solving all people's problems, but helping people at least understand what it is in them.

00:21:49:18 - 00:21:59:19
 Gwyneth
 That might be from a mental health standpoint, impacting their or mindset standpoint, how it's impacting how they spend and use money.

00:21:59:21 - 00:22:14:07
 Mary
 Well, I think that's really fascinating. And I'm just going to switch to the one segment we have here, which is that's what you said and it's what, but it's what you wrote or it's someone. Right? It's on your website. I imagine it's you, but it ties to what you're just describing. The language was like how some of the lenders.

00:22:14:09 - 00:22:15:03
 Gwyneth
 Would describe.

00:22:15:03 - 00:22:40:07
 Mary
 People as like deadbeats. And I personally have heard in the past, like home lenders describe someone is like a financial terrorist and very extreme is our way of labeling it. But what you wrote is it's hard to build meaningful solutions when you have disdain for the consumer served. And I just wanted to dig a little bit more into that, because I do feel like that is such an important part.

00:22:40:07 - 00:22:47:16
 Mary
 And, you know, do you you still feel like that, that that is what's happening largely if like someone becomes and. Yes.

00:22:47:16 - 00:23:15:23
 Gwyneth
 So what I would say is this there I mean, as generations have changed and especially younger, younger generations are definitely not putting up with people, treating them poorly and all those things, things are changing. But by and large, historical people and collections see people who fall behind as deadbeats. And I once had an advisor say to me, we were talking about spirits company, and he was like, listen, if you don't sue people, like, you're not going to do well.

00:23:16:05 - 00:23:33:23
 Gwyneth
 I'm like, I'm sorry. I just don't believe in suing people. I just don't. I feel like if you can really provide a way for people to self cure and be able to do things that you can, you don't need to sue them. And grant, there are going to be some people who don't do that. And if you give them every possible, if you've really exhausted all the opportunities and then they don't do it fine.

00:23:33:23 - 00:23:59:22
 Gwyneth
 But like, I didn't want to do that. And he actually said to me, some people just deserve to be sued. And I remember thinking, oh my God, like, that's not what I believe. And it's always very complicated with again, money, things and trauma that people are have related to money when you've got maybe you're suffering from cancer and you are trying to recover and you've obviously fallen behind bunch of bills and now you have medical bills and you're and it's overwhelming.

00:24:00:00 - 00:24:23:04
 Gwyneth
 Maybe. Yeah, sure, they should be in contact. But in the grand scheme of what's important to that person at that time, that's not the most important thing. I think over and over again in collections offices, you know, you know, that the deadbeat scenario, I've gone to collections conferences where people talk about like, sort of like how they like basically torture or treat poorly or freeze all people someone's accounts or like how they have the power and they can do these things to these people.

00:24:23:06 - 00:24:42:12
 Gwyneth
 And it's really interesting because when I go to a collections conference and these are I got to only credit you in collections conferences and people say these things, it's like, note to self, unfortunately, they're probably not going to be my partner because we they don't share the ethos that I have. But for people legacy collections, they genuinely view poorly people who are behind.

00:24:42:18 - 00:25:11:14
 Gwyneth
 And they have they treat them as if everybody went to the Louis Vuitton store, spent all this money and didn't want to pay it back when. That's far from what the circumstance typically is. I'm not saying, you know, people that abuse the system, of course. Do people every and everything, right. There's no no place. But I do think that the industry, while I think newer entrants like myself are really focusing it in that direction, there's still a lot of that legacy behavior of the fear, the shame, the manipulative manipulation.

00:25:11:14 - 00:25:32:03
 Gwyneth
 The big issue right now is, course, that getting people to pay debt they don't even owe because they feel like they're under duress to do so. And so I think I think with the the way the world is going, I think the younger generation just doesn't tolerate kind of those sort of messaging or approach. And I think that more people are realizing that that's not the way moving forward.

00:25:32:08 - 00:25:53:12
 Gwyneth
 But I do think historically, collections has come from that place of being angry or, or felt betrayed. I mean, I've talked to people in small credit unions like I told them, not the well, they like. I told them I tried to work with them on their car and they still screwed us over. And it's like, listen, like it's that personal trait, right?

00:25:53:14 - 00:26:22:00
 Gwyneth
 I take this personally. If you take it personally. Yeah, it's very upsetting, but it's not personal. Someone, someone who's defaulting on a loan, it it's not about you. It's about them and about something going on in their life. And so I do think that that is something that is so super intrinsic. The other part of it is that in third party collections, it is commission based and so is on a weekly, monthly basis, both, you know, for all of the collectors.

00:26:22:06 - 00:26:45:06
 Gwyneth
 So when people are very much incentivized by money, you think about a salesperson generally not even a debt collector or a salesperson in general. They're really aggressive. And they constantly flood you with like, request and pepper you. Aren't you interested? Or you want to buy, like, you know, nonstop, right. Turn that into now. It's a more adversarial relationship where that person's like the way I get my bonus is that you pay me.

00:26:45:10 - 00:27:00:21
 Gwyneth
 So I need to figure out what to say to you, to make you pay me. And more likely, I'm going to resort, sadly, to threats and intimidation that I am going to resort to. Like being super nice to you, because I probably don't believe that being super nice to you is going to yield any results. You know? And for some people that's true.

00:27:00:23 - 00:27:32:02
 Gwyneth
 But but the point is that like that is, you know, the mentality a lot is very much like these people are disposable and we don't care about having a future relationship with them. We only care about the short term monetary gain of getting them to pay something. And that's what we're trying to change. That's different because we believe that you can actually strengthen your relationship, particularly with credit members, by being that through their darkest days and working with people so they can get to the other side as opposed to alienating them.

00:27:32:04 - 00:27:47:18
 Mary
 Yeah, I would think that would be that would be a better approach. And I it's something bizarre we have in common. I used to go to debt collection conferences, but it was my beat once, once upon a time, and I know exactly what you're saying. Also, it's like such a wild world out there. I'm still I'm sure it still is.

00:27:47:18 - 00:27:55:12
 Mary
 I want to talk a little bit more of like. I mean, all ages could be in debt, but do you find younger people are.

00:27:55:14 - 00:28:16:10
 Gwyneth
 So worst among Gen Z and millennials? I mean, and many of them are saddled with both the, you know, student loan debt. What's really happened was, you know, cost of college is obviously increased exponentially and people didn't have to pay during the pandemic. There's been servicer changes. So fully 20% of student loans are delinquent right now.

00:28:16:15 - 00:28:41:03
 Gwyneth
 For a lot of millennials during the pandemic, people started getting cars like people didn't care about cars. Then with the pandemic and people worried about traveling in groups, people started to buy cars. By the time that people started to buy cars, the the prices were going up and the interest rates were going up. So there's a lot of people underwater on car loans that they got during the time when like after the supply chain issues, when there was a plentiful amount of cars.

00:28:41:05 - 00:29:07:07
 Gwyneth
 So overall charged off that super delinquent debt is worse among Gen Z and millennials. And then it gets a little better as you go up the generations. And then you have a check over 70 where things start to fall off a little bit. And a lot of that has probably to do with cognitive issues. Right. And that's, you know, financial services like usually you can identify if you're trying up to ten years ahead of someone with cognitive decline because they start to show it in their finances.

00:29:07:08 - 00:29:32:13
 Gwyneth
 But by and large, typically it's it is the youngest generation that usually struggles the most. That's that's also because of lack of information and knowledge. And then it goes up there, but like right now, like so Gen Z far and away is doing the worst, even though they have the less the least amount of actual debt, it's high in proportion to their salaries and incomes and a lot of them have struggled with, you know, graduating in a time where jobs were not plentiful.

00:29:32:13 - 00:29:52:03
 Gwyneth
 Right. Lots of people struggled to get jobs, had offers rescinded. And that's because the economy changed really quickly. Right. And, even with I, you know, what people are talking about, it's more of an impact on entry level jobs, right? If I so let's say, you know, it's meant for people who can make decisions and can direct it.

00:29:52:03 - 00:29:56:10
 Gwyneth
 Then people who have experience are going to win out over people who are just starting out.

00:29:56:12 - 00:30:18:10
 Mary
 Yeah. And I heard in the side where some like larger, corporations are, their first interviews are just like bunch of conversations with, with people. And I'm like, oh my gosh, that is like my worst nightmare. I feel so bad for, people just getting their first jobs. But Gwyneth, I have one last question for you. But before I ask it, you know, if someone wants to get in touch with you, how should they do that?

00:30:18:10 - 00:30:25:05
 Mary
 And any like, you know, any last thoughts on like, debt collection technology or like something you're really excited about in fintech right now?

00:30:25:07 - 00:30:49:14
 Gwyneth
 Well, no, I think what's really exciting is that, you know, with we live in a world where people become increasingly digital and there's such an opportunity to actually provide more for people a lot less expensively, like so many, credit unions and others could actually better serve their members by being more digital in their approach and leveraging technologies like, like mine or digital interfaces for on their own website.

00:30:49:16 - 00:31:19:14
 Gwyneth
 Easy, easy. Two ways to pay. I mean, it's really kind of an exciting time because there's never been more access to tools and opportunity out there, but it's obviously it's a crowded space. Right. And so finding great, way to communicate that and reach people is, is, is exciting the opportunity to do that. I mean, I think I also in both lending and in collections has the opportunity to like provide new opportunities to get, for people to get credit who might otherwise be overlooked, which I think is really exciting.

00:31:19:16 - 00:31:39:14
 Gwyneth
 And also like, provide insights like, you know, we can start to we can do default prediction. You can actually figure out people who look like they're about to, to go, you know, to go fall off the edge and like If we use early interventions instead, we can actually prevent people from getting in a place where they would need, someone like us to like reach out to them.

00:31:39:14 - 00:32:01:16
 Gwyneth
 So I'm, I'm excited because I think the interesting thing about AI is that we actually have a treasure trove of data that we can better utilize to actually help optimize outcomes for people and for financial institutions. And so that's really exciting. I mean, for me, you know, I really want to change debt collection. I really want us to talk about credit recovery.

00:32:01:16 - 00:32:21:07
 Gwyneth
 It's not just about the falling off point. How do we how get people to the other side. We all financial institutions make money off of lending, and you need good people to lend to. So it's in your best interests that people can get through collections and learn the right lessons, and actually be better prepared to not get more high interest rate debt.

00:32:21:07 - 00:32:56:03
 Gwyneth
 But actually to be able to, to borrow. Right. So then you have a broader pool of people that you can lend to, and even people who will come back to you because you were there during their precious time. So I think that's what's exciting. And we want to create credit recovery. I like to say, as a, as an industry that doesn't exist today, you know, in terms of getting in touch with me, our website is WW, dot get, get re mint r m y intercom like hashtag get re minted to new financial future like a play on the word mint and people can be me at Gwyneth y.

00:32:56:03 - 00:33:30:11
 Gwyneth
 And it's just like what if Paltrow in spelling get romance.com. You know, always interested in talking to you and working with people. You know, in general, you know, we are really about being problem solvers. So we love to work with credit unions and really understand who their, membership base is. Same thing with community banks and others, and not just necessarily like credit unions, but we really seek to be a partner and understand your whoever your constituency is, and we want to serve them well and represent you well so that you can maintain that relationship and only grow it from our actions.

00:33:30:13 - 00:33:35:01
 Mary
 And, just my last question, what is the image on your phone's lock screen?

00:33:35:03 - 00:33:53:07
 Gwyneth
 Oh, right now it's a picture of of San Francisco from a direction looking backwards. So it's really funny. It's like a, it's a view that most people don't see because I live in the southern part of the city, so it's like a view from the park, in my neighborhood. So it used to be my my app. But then I decided to go with the city.

00:33:53:09 - 00:34:01:16
 Mary
 Well, I like both. So Gwen, thanks so much for being on the show today. As you said, money isn't everything. But also it is. So thank you for joining me today.

00:34:01:20 - 00:34:04:21
 Gwyneth
 Thank you.

00:34:04:23 - 00:34:24:14
 Mary
 Okay, so one thing I learned is there's a debt collection fintech startup that connects people with financial therapists. And I think that's so cool because psychological issues can affect money stuff and really big ways. If you enjoy today's Money is in Everything episode, make sure to hit that follow button on Spotify, Apple Podcasts, YouTube, or wherever you're listening or watching.

00:34:24:20 - 00:34:37:03
 Mary
 I've got more great conversations coming your way, including Up Next, which will explore helping members and customers build their credit by paying their bills like rent and utilities, rather than taking on more debt. Catch you then.