What’s the role of a debt collector?
A debt collectors’ role is to collect debts (usually in the form of money) on behalf of a business.
This could be:
- a banker securing a debt themselves or
- someone on behalf of the lender (for example, an independent acquisition group).
Learning to collect debts the right way, whether commercial or consumer needs patience, persistence and self-control.
The wisest debt collectors have sharpened their skills over the years, learning what approaches tend to push debtors towards making amends.
For those new on this business who haven’t yet had time to improve their collection techniques, however, some simple strategies can help them get started.
Here are some of the best tips for easy and fast ways to collect debts:
NEVER use rude or intimidating tactics.
One of the most, if not the most important reminder for new collectors is to remember when collecting debts is NEVER to be rude or intimidating.
This is the most fatal mistake a collector can make – not only are intimidating tactics ineffective, they can provoke heavy legal consequences.
Debt collectors should never make threats or make untrue statements of any sort during a collection effort.
What to do if a debtor becomes hostile or confrontational?
A debt collector should remain calm, composed and above all, professional. You should speak to the debtor in a way that they will relax and calm down.
Engage to them in a cool tone, then when they regain composure that’s the time to discuss the debt.
This way, you can have a better chance of a positive result in the collection.
Strategise and Prioritise your collection.
It makes the most sense to direct the collection staff at the most significant receipts since the profit on them is highest. An option is to use another party or firm to discover which clients are in the best financial situation and target those invoices.
What to do on hard to locate debtors?
There are some instances that you can’t find debtors. To avoid further situations like this, always update your system. Refresh names, address and contacts.
If possible collect information wherever you can, example on social media. Be resourceful so that your database can be always updated and your collection not hindered.
Be flexible in demands.
Though it is your job as a debt collector to handle all the necessary ways to get payment, it is smart to know why sometimes clients can’t pay.
When you discover the reason, try to plan on how both parties, creditor and debtor, can benefit.
It doesn’t make sense to impose and collect the total debt if they can’t pay it.
It would be beneficial to receive on terms or whatever payment plan that will start the flow of cash to the creditors and will not put the debtors in trouble.
Every situation is unique, and it is a must to get a clear picture of the debtor’s financial situation before creating the payment plan.
Debt recovery, in the end, should be to collect more funds versus the collection effort expended. Whatever the decisions may be regarding the other strategies, be sure to put everything in writing. For a better understanding of these matters visit www.woodsandday.com.au, they are experienced debt collectors for more than ten years and are experts in this field.