Debt Collectors May Disappear, but Harassment Takes a New Form

The sophistication of artificial intelligence (AI) technology is now threatening the profession of debt collectors. AI agents are beginning to be used to pursue debtors who are late in paying their obligations.

In the United States, high inflation and employment difficulties have pushed national debt levels to record highs. This has led to a sharp increase in late payments and credit delinquencies.

Creditors are gradually turning to AI agents to replace human debt collectors in chasing overdue payments. A recent report from Futurism highlights the growing use of AI in debt collection. One example involved a Seattle resident named Ben, who received a call from “Eve”, an artificial voice agent sent by the collection firm ProCollect, regarding a disputed debt of US$226 owed to his previous landlord. Ben had actually already settled the obligation.

During the call, Eve repeatedly asked, “Would you like to settle this today with a card or bank transfer?” and refused to connect Ben to a human staff member despite his explanations. Ben eventually managed to reach a human agent after testing the system in an unconventional way. The human officer then verified that the debt had indeed been paid and the collection attempt was an error.

According to Pedro Fernández, founder of the AI-based calling company Altur, the debt collection industry is one of the earliest and fastest sectors to adopt this technology. His company alone handles over 2.5 million collection calls each month using AI agents. However, the system has a significant weakness. Debt data often changes hands from the original creditor to other debt buyers, resulting in messy records. This disorganisation makes AI prone to errors, such as pursuing debts that have already been settled or targeting the wrong individuals.

While human debt collectors are often considered a nuisance, they are far more flexible and capable of negotiating when data discrepancies or disputes arise. Unlike automated systems that operate based on pre-programmed patterns and data, humans can listen to explanations, understand context, and resolve issues in a more reasonable manner.

The use of AI in debt collection continues to grow alongside technological advancements. Although it offers efficiency for companies, challenges regarding data accuracy and fairness in the collection process remain significant hurdles that must be addressed before the technology can be fully trusted.