Resistance to online technology, specifically building the Internet into an effective collections channel, is finally starting to abate, according to Waltham, Mass.-based Mercator Advisory Group Inc.

While Mercator estimates about 5% of delinquencies are recovered online, signs are emerging that a growing percentage of delinquent consumers - even those in late stage collections - are not only becoming more receptive to using the online channel to pay overdue bills but in some cases are requesting that lenders provide the option as opposed to negotiating with an agent or paying through automated phone systems.

Fueling acceptance is a growing comfort level among consumers with banking, bill payment and making purchases online. For some individuals, conducting transactions via the Web is more intuitive than interacting with a bank teller, mailing a payment or going to a retail store to make a purchase.

"Many consumers definitely have a greater comfort and trust level paying a past due account over the Internet than they do with other channels," says Jess Patterson, direction of IT for Coast to Coast Financial Solutions, a Thousand Oaks Calif.-based collection agency that uses an online collection application. "The convenience factor of being able to pay the bill on their time and the feeling of anonymity also play a role."

For more about a report issued by Mercator, as well as the online collections trend, watch for a detailed report in Collections & Credit Risk magazine.

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