No matter what type of business you own or what the company provides to consumers, debt will always be sitting in the collections pile. Debtors typically do not plan to stop paying you, but many unforeseen circumstances can occur that get in the way of repaying what is due.
Collecting on the debt becomes harder and harder the longer it sits in a pile. When you plan on pursuing the debtor for the balance owed, you must follow specific guidelines and rules.
Hiring a debt collector is always a good idea to ensure that all collection practices abide by the laws of your country, as well as to ensure that all processes utilized protect the company from court actions. You don’t want a debtor to win the case based off of bad practices or technicalities. That of course is assuming that it comes to that point down the road, but the debt is often resolved in a settlement or repayment arrangement.
Key Guidelines for Debt Collectors
Once you decide to pursue a debt owed, you must follow certain rules and guidelines to ensure a legal and safe attempt at collecting the debt from the debtor. To begin with, you must treat debtors with respect and in a fair manner. When contacting them, you must have a valid reason to do so and it is a good idea to avoid constant calling, which can be turned around into harassment.
Use calls for:
Providing information about the account to the debtor
Establishing repayment arrangements
Offering a settlement or special repayment plan
Reviewing an existing payment arrangement status
Do not use calls for:
Embarrassment around other parties or people
To scare the debtor with aggressive conversation
To annoy the debtor and wear them out
Things to Avoid
It is very important that you do not create letters or make verbal conversation that can be misleading or impersonated. In other words, you cannot pretend to be someone you are not or a company that you are not with. Don’t pretend that you are part of another major organization in order to scare the consumer. You also cannot tell them you will do something that you won’t or may not do. For instance, don’t tell them that you will transfer the account to a high level authority or that you will seek repossession of their home. In addition, you definitely cannot threaten to do things that you cannot or will not do, such as take all their possessions and have the police arrest them.
Collecting debt is a hard thing to do and companies can easily sway in the wrong direction or say something that they may end up regretting. This is why hiring a deb collector is a good decision because it helps protect your business and also helps to recapture all or part of the given debt.