Have you heard the saying, “You never get a second chance to make a first impression?” This saying is very accurate when speaking of a debt collection phone call. A debt collection phone can go incredibly right from the beginning or it can horribly wrong. The first few words you say will either make or break the chances of collection. We will cover the best way to make your introduction in a debt collection phone call and greatly increase your chances in collecting the bad debt.
The predictable and normally used approach cuts straight to the chase. You introduce yourself and bring up the unpaid debt. There is nothing wrong with this approach; however it is plain and does not create any interest in the debtor to pay. The debtor is caught up their own world and it will take a more captivating approach to pique the debtor’s interest.
The more appealing approach is to preface the call and use the debtor’s name as often as you can. Everyone enjoys hearing their name and debtors are no different. It is also important to bring up the debtor’s reputation or something that is at stake if they do not pay the debt. Also show your understanding stating that you understand there may be many reasons why the debt has not been paid, but you are here to help him restore his credit and reputation. This approach is much more effective when making a debt collection phone call. Remember to stress the importance and urgency in regards to your phone call with the debtor. The more incentive you can get across to the debtor, the more likely they will be to pay. Remember the importance of your initial approach to a collection call, this first impression can make all of the difference in whether you are able to collect the bad debt or not.
Posts Tagged ‘Collection’
Business Debt Collection ? Commencing a Debt Collection Phone Call
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Consumers: Fight Illegal Debt Collection Practices
Many times the tactics used by debt collectors can be considered harassment, but few debtors are aware of the rules or how they can respond to illegal debt collection practices. Collection agencies make their money by purchasing debt for pennies on the dollar and attempting to collect the full amount from the borrower plus as many fees they can tack on and get away with. The problem of “collector abuse” became so prevalent that Congress was obliged to pass the Fair Debt Collection Act (FDCA) in the early 1970s. This act made certain practices by debt collection agencies illegal, like attempting to make contact with the debtor after 9 PM local time or communicating details of the debtor’s debts to third parties with no need to know such personal information. To prevent fraudulent, unfair, or illegal debt collection activities, take the following steps: –Be suspicious. The debt collector is not a doctor, lawyer, or a priest. No confidentiality exists with a debt collector. Be cautious of clever word play on the part of the debt collector to put words in your mouth. Never give out personal financial information (like bank account numbers) to a debt collector over the phone. –Demand everything in writing. Notice that this is not a request, it is a demand. Under the laws of the FDCA, a collector is required to provide certain information to the debtor in writing, but only when requested. Some information that collectors won’t generally volunteer until asked is verification of the debt and justification to collect the debt. –Don’t ignore the problem. Debt is a very real problem that doesn’t go away when ignored. Not only does ignoring the debt allow it to grow, but it also allows collectors to more easily damage credit scores, garnish wages, etc. Ignoring the problem can also diminish the rights of the debtor. For example, the collector can’t be compelled to provide verification of a debt unless request for verification is made within 30 days of the debtor being advised by the collector of their right to dispute the amount of the debt. The notice of the right to dispute a claim by a collector must be presented to the debtor within 5 days of initial contact. –Don’t fall victim to pressure tactics. Pressure is what collection agencies deal in. If they weren’t good at applying pressure, they wouldn’t be able to collect, and therefore wouldn’t be in business. Use the required waiting periods to your advantage by consulting with lawyers and researching credit laws. Consumers will find that it is much harder to apply pressure to an educated debtor than one who has chosen to remain unknowing of the law. Remember that debt collection agencies are private businesses that accept financial losses as a risk of doing business. While every attempt should be made by a debtor to clear their debts, nothing allows a collector to break the law and resort to harassment or abuse in order to mitigate losses to their own business. [...]
DEBT COLLECTION IN DEVELOPING COUNTRIES. CIS ? UKRAINE
The Ukrainian debt collection industry was only in its formative stages when it met the challenges of the world financial crisis in the middle November 2008. The collapse of the world’s banking system, high and rising unemployment and the subsequent panic led to rapidly increasing bad loans portfolios of up to 20%, with 30% of bad debts being a critical line for the Ukrainian banking system.
Nevertheless, financial institutions outsource debt collection for 7% of their total debt portfolios only leaving them exposed to high levels of risk.
In addition to the misadventures mentioned above, B2C collection suffered a lot from government endeavours to license the collection industry.
The President’s and Ministry’s of justice statements about the illegality of the collection business has led to a decrease in the rates of collection and subsequent effectiveness along with the client’s interest to cooperate with collectors.
As a logical reaction, the collectors looked to protect their professional interests and establish an appropriate legal basis for their activities. In March 2009 an association of Ukrainian collection companies was established, with its first endeavours directed on protecting the collector’s reputation and the development of fair debt collection practice rules.
However, the licensing of the collection companies can an is likely to cause small and medium companies to withdraw from the marketplace. Only 6-8 financially strong collection companies can survive, yet the Ukrainian market is full of dozen’s of small start up collection companies that commenced business in Q1 2009, owing to mass media hype talking about “unbelievable profitability of the collection business in crisis times”.
The situation is much better in the commercial sphere; a lot of trading companies have recovered after the economic shock in February-March 2009 and now are able to pay their debts.
However, B2B collection is less developed than the collection of consumer debts. Commercial debt collection was not a very popular or well-known service for Ukrainian businessmen, until the economic crisis which has changed their outlook.
The share of delinquent debts increased fourfold over the past year; internal collection efforts being not so effective, businessmen are now paying attention to the services offered by B2B collectors.
Thus, the endeavours of B2B collectors are heavily directed on popularization of B2B collection idea. “It is cheaper to outsource collection than to try to do it yourselves”, “Commercial debt collection is fast, efficient and an easy way to recover debts”, – such slogans can be seen in the promotional material of B2B collectors.
Generally, this market is increasing, and as result, nearly 7 collection companies declared their intention to deal with B2B debts in 2009. Experts have stated “it will be hard for them to survive in tough traditional competition with lawyers”, and so it is necessary to for the competition offered by B2B collection companies to became more focused in producing fast efficient and cost effective results, as a lot of legal companies have reduced their prices for legal collection due to the competition..
The future of the Ukrainian collection business is yet to be seen, owing to its infancy, the financial [...]
