Learning to effectively collect debts, whether commercial (business-to-business) or consumer (debts owed by individuals) requires patience and diligence. The best debt collectors have honed their skills over years, learning what strategies tend to push debtors towards making payments. For new debt collectors who haven’t yet had time to develop their collection techniques, however, there are some fairly simple strategies that can help them get started.
The most important thing for any new collector to remember when contacting debtors is to NEVER use abusive or threatening collection tactics. This is the absolute worst mistake a collector can make – not only are abusive tactics ineffective, they can incur hefty legal ramifications. Collectors should never make threats towards a debtor or make false claims of any sort during a collection effort.
It is also important for new collectors to bear in mind that debtors often “go on the offensive,” so to speak, when contacted by a debt collection agency. If a debtor becomes aggressive or confrontational, it is important for the collector to remain calm and professional. Try to speak to the debtor in a way that will encourage him or her to calm down so you can discuss the debt, or end the call and contact him again once he’s had time to regain composure. Getting into a huge, emotionally-charged argument with a debtor can only hinder the collection effort.
When contacting debtors, it is also important to demand prompt action. Set specific deadlines for payments or, at the least, for further contact, and if the deadlines are missed contact the debtor the next day. This will let him/her know that the collection agency is taking the debt seriously and that failure to act will cause an escalation of the collection effort. Be firm with the debtor so he will take the collection seriously.
One final tip for new debt collectors is to be reasonable in demands made to debtors. Find out the reason payments haven’t been made and use that information to develop a solution to the problem that works for both the debtor and creditor. If a debtor cannot afford to pay off the balance in full, there is no point trying to force them to pay it all in one lump sum – the debtor is only likely to become more frustrated and the creditor still receives nothing. It may be beneficial to create a payment plan that will start the flow of money back to the creditor and won’t force the debtor into financial trouble. Each situation is unique so it is important to gain as clear of an understanding of the debtor’s financial situation as possible when creating a payment plan.
Using these basic strategies as a starting point, new debt collectors can fairly quickly gain an idea of what other tactics and strategies work to improve the efficiency of the collection process.
Be sure to check out our article on Tips For Successful Debt Collections for more insights on successful debt collection.