How to Write Debt Collection Policies and Procedures

It is advisable for every third party debt collection agency to have, in writing, and to follow a set and well-enforced code of policies and regulations. If written correctly, policies and procedures will allow your business to function more smoothly and efficiently, will protect you and your employees from violating local, state, and federal laws, and will positively affect the overall health and wellbeing of your business. The key phrase there, however, is “IF written correctly.” Poorly written policies are not going to help your business and may hurt it, so it is very important that you are careful to correctly create your policies and procedures.   

Limit Access

To start off with, one of the most important things to keep in mind is that not every employee needs to see every single policy and procedure that you have in place. In fact, letting all employees have full access to all policies and procedures can cause problems and complaints and dampen workplace morale, especially since many policies and procedures will be in the best interest of the company and not of each individual employee.

Thus, once you have written your policies and procedures, go over them and determine who needs to see what and then release information to the appropriate people as you see fit, always keeping in mind what will be best for your business as a whole.

Consult a Legal Professional

It is also wise to consider consulting a legal professional when it comes to writing your policies and procedures. A lawyer can help to ensure that all of your policies and procedures are within the bounds of the law and that you will not find yourself in trouble for enforcing them.

You can actually hire a legal team to write all of your policies and procedures for you, with your input of course, or you can save more money by writing them yourself and having a legal professional look over them for you and offer suggestions and corrections as needed.

Consider the “Ws”

Finally, as you write your policies and procedures, don’t forget to ask yourself these “w” questions and to make sure that you know the answers:

l  Who will carry out/enforce the policy/see that it is enforced and followed?

l  Why is the policy important?

l  What will be done if the policy is violated?

l  When and in what circumstances does the policy apply, and are there any exceptions?

l  Where and in what ways does the policy impact the company?

Writing policies and procedures is not easy and will definitely take a lot of thought and careful planning. However, having them in place can greatly help your business, even and especially during rough times, making all of your hard work worthwhile.

Unfair Laws Against Debt Collectors

It is certainly no secret that being a debt collector is hard work. These professionals must deal with rude people, hang-ups, and, more often than not, low success rates. On top of all of these problems, however, they typically face lawsuits from consumers and others just for doing their jobs. The law is written in favor of consumers, and it’s very easy to find legal fault with things debt collectors do, which means that most live in constant fear of being sued, making their already-difficult jobs even more difficult.   

As if the constant fear of a lawsuit wasn’t bad enough, debt collectors are often subjected to very unfair and inconsistent laws that other business people are not subjected to. For example, while other businesses can charge and pass along transaction fees, debt collectors are severely limited in their ability to do this, which means they and their businesses often lose money through processing the payments that they are able to collect upon, payments which are quite hard-won in the first place.

Debit and Credit Concerns

The vast majority of today’s consumers pay for items, services, or owed debts using their credit or debit cards. While doing so is super convenient for them, it charges a not so convenient fee to the person or business that is receiving the payment, known as a processing fee. Most businesses are allowed to escape these fees, which can quickly add up, by charging them to the consumer, but debt collectors are not allowed to charge these fees, which costs them big money over time.

Why It’s Wrong

There are many reasons that it’s wrong for debt collectors not to be allowed to charge transaction fees. To begin with, it is just not fair; if other businesses can do it and recoup some of their costs, why can’t debt collectors?

To make matters even worse, debt collectors are not required to offer the convenience of credit or debit payments to consumers; they do so to offer convenience to those consumers, and they get punished for their kind consideration. Furthermore, it is not as if debt collectors are trying to extort consumers or add on to their debt; they are simply trying to recoup the charges that they incur as they service the consumers that they work with.

The fact of the matter is that there are many unfair laws affecting debt collectors, and sadly, these laws don’t show any hope of being repealed soon, so debt collectors have to abide by them. Hopefully, in the future, however, the laws will change to respect the rights of not just consumers and debtors, but of the debt collectors as well.

How Consumers Can Interact with Debt Collections

When consumers owe a debt, they should, of course, make every attempt to pay it.Not doing so is not only immoral and unethical, but it is also an easy way to ruin one’s credit and find accounts sent to collections.

However, before paying on a debt that they have been contacted about, consumers are advised to request documentation and verification of the debt. This will ensure that the debt in question is

actually THEIR debt and that they are not being wrongfully contacted about a debt that they do not actually owe.

In fact, verification of debts and other processes are so important that the Consumer Financial Protection Bureau is currently conducting research on issues experienced by debtors. It plans to use the input it receives to update laws related to debt collection and possibly institute some new ones as well.

The big concern that the organization has is with debt recovery professionals contacting the wrong people about debts. When many collection agencies purchase debt, they often don’t get a lot of information on the debtor. This means that, in their effort to track down that person, they may end up finding the wrong person with the same or similar name. Sometimes, the wrong people even end up paying debts that are not theirs as a result.

Obviously, this is a concern, one that the organization is hoping to rectify by requiring more information to contact people about debts and possibly instituting other protective laws as well.

Consumers who have had an experience similar to this or who would like to weigh in with their own two cents are encouraged to share their thoughts at RegulationRoom.org. Their comments will be sent to the Consumer Financial Protection Bureau to help them in their research and thus could even impact future laws.

A Day in the Life of a Debt Collector

Debt collectors are some of the most dreaded and feared people in the working world, especially for those who have a lot of debt. However, these professionals are a lot more “normal” and “typical” than many people think.  

To begin with, they are not “thugs” or “criminals,” as is often the stereotype. Instead, they are just people trying to make a living at a tough profession: the profession of collecting on people’s bad debts.

Most of these professionals work at agencies where the focus is solely on collecting on debt, typically for business clients. As such, the working day for most debt collectors begins with a morning meeting with their managers. Their managers will communicate the goals for the day, give any reminders necessary about strategies and policies, and hopefully give the collectors a positive message before sending them off to their individual work stations.

Once there, debt collectors will go over the accounts they need to follow up on or make contact with for the day. They’ll typically read notes on previous conversations they’ve had or other collectors have had with the debtor, if applicable, to help them better combat the debt and to increase the chances of collecting on it.

In addition to making outbound collection calls, debt collectors may also take inbound calls from clients and search for recent information on debtors whom they are having trouble reaching. This information-gathering process is known as “skip tracing,” a process through which debt collectors access secure databases of information on debt-owing consumers in an effort to track them down and make contact with them.

When debt collectors do make contact with clients, their goal is to attempt to collect on the debt owed or to work out some kind of repayment plan or schedule with the debtor. They use their extensive training to try and make this happen, and, on average, debt collectors are able to have success with about one in four consumers that they contact.

Though they do have some success, debt collectors often have to put up with a lot on behalf of debtors. It is not uncommon for them to be screamed at or cursed at or just plain hung up on. However, debt collectors must act professionally at all times and use the conflict resolution techniques they have learned to attempt to settle debts, even with difficult consumers.

A debt collector’s job is certainly not easy, but, for these professionals, all of this is just in a day’s work!

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Debt Collectors and Compliance

Every business that extends credit, at one time or another, is going to run into a situation in which it needs to collect money from clients. When this happens, businesses can either try and collect the money they are owed on their own, or they can hire a debt collection agency to do it for them. Either way, it’s important to be respectful of clients and in compliance with debt collection laws at all times. While debt collection agencies, especially, have to be in compliance with these laws, businesses should also practice them to avoid ruining their reputations and client relations.

Who Makes the Rules?

The rules that govern how debt collectors may act were established by the Fair Debt Collection Practices Act, which has been in effect since 1978. The law was designed to protect consumers from abuse, deception, and other unfair acts in debt collection. These rules apply to all consumer debt collections.

The Basic Rules

While there are many federal rules in place as to how debt collectors must act and what they cannot do- rules which all debt collectors should know and follow- the basic rules are these:

l  Debt collectors must validate the debt, or, in other words, provide proof to the consumer that the debt exists and is owed

l  Debt collectors must not harass or abuse consumers in any way

l  Debt collectors must not provide any false information

l  Debt collectors must properly and accurately identify themselves and the reason for their communication with the consumer

l  Debt collectors must call consumers at reasonable times

If these rules and laws are not followed, a consumer could potentially sue a debt collector, leading to trouble and a damaged reputation for the business and furthering its problem with debts. As such, it is important that your business and anyone it hires acts, at all times, in accordance with the law as it relates to debt collection.

Let Kinum Collect Your Money

When you’re owed money from customers,you might think the most important thing is that you get paid. And, while getting paid certainly is important, it’s equally important to maintain your good reputation and, when possible, your good relationship with clients.

One of the ways you can ensure you get paid and get along with customers is to always demand payment upfront or cash on delivery. If you’re not giving people anything on credit, then you never have to worry about not getting paid or about making anyone angry.

If you must offer credit to your customers, then you are going to run into customers who don’t pay or who pay late. That’s just part of doing business unfortunately. If that does happen to you, always try getting your money through “gentle reminders” first. A friendly “reminder” phone call or email can

go a long way toward maintaining your relationship with customers and still getting your money.

Of course, if customers don’t respond to your “gentle” reminders, you will have to up the ante a bit with more urgent phone calls and letters. Be consistent with your reminders, but remember, you can (and should!) still be cordial and friendly. After all, you have your business’s reputation to think about; plus, the law prohibits you from threatening or being overly aggressive with your delinquent customers. If none of your tactics work, you may, unfortunately, have to either let the debt go or settle it in court, but at least you will have maintained your dignity through it all.

Of course, if you don’t want to deal with any of this stress and hassle, you can always hire a third-party collection agency to do it for you. If you go that route, just make sure you are careful to hire a reputable collection agency that operates within the bounds of the law and that will be just as careful as you would to protect your business’s good name.  #ThirdPartyCollectionAgency  #Kinum

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Better Management of Accounts Receivable Could Save Your Business

If you’re a business owner, then you already know how important it is (and how difficult it can sometimes be) to get paid by your clients and by other businesses in a timely manner. This is such a serious problem for modern-day businesses that President Obama has publicly urged larger companies to pay the smaller vendors they owe money to and has even proposed a “Supplier Pay” initiative to increase the likelihood of this happening.  

Whether you have high hopes for the initiative or don’t think it will end up doing much good, the fact still remains that it’s up to you, at the end of the day, to properly manage your accounts receivable, i.e. the accounts for which you have earned revenue but haven’t yet collected it. 

A lot of people think they can just act like they already have the earned money, which doesn’t work so well and could lead to overdrafts and other problems. The thing to remember is that there is a big difference between managing money you actually have and managing accounts receivable, and it’s very important you understand how to properly and effectively manage those accounts that aren’t yet paid up. To help you with that, we’ve provided a few simple tips that, if practiced, will lead to better management of your accounts receivables.

Tip #1: Be Careful About Extending Credit

These days, many consumers feel like credit is a right, rather than a privilege. Don’t perpetuate this feeling of entitlement! Be careful about who you extend credit to by exacting background and credit checks and the like. Even if you’re careful, you’ll still have some people who don’t pay up, but you’ll weed out a lot of non-paying/delinquent clients if you’re choosy about who you give credit to.

Tip #2: Have Shorter AP Days and Longer AR Days

Another good strategy is to always make your accounts receivable days- i.e. the number of days it takes you to receive payment- less than your accounts payable days- the days when you have to pay money out of the business pocket. This way, you’ll be able to collect money more quickly than you owe it, always allowing you to stay in the black.

Tip #3: Hire a Great CPA

Finally, make sure you hire a skilled accountant, one who is very familiar with business accounting and who can help you with all of your financial questions and concerns. Once you do have a good accountant, use him or her to the fullest! Have your accountant help you with any and all financial matters, and whenever you don’t understand anything or have a question, go to your accountant for help and expert advice.

If you can follow these simple tips, you should have a much easier time managing your accounts receivable, which will bring many benefits your way! #ManageAccountsReceivables #Kinum

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What You Need to Know About Commercial Debt Collection

If you are new to the world of debt collection, you probably have quite a few questions and quite a few things you don’t understand. First things first, you should know that when you hear the term

“debt collection,” that simply means the methods a company uses to recover debts from its clients after their accounts become delinquent.

Commercial debt collection, then, is the methods used to collect money that is owed by other businesses. You can pursue commercial debt collections on your own, or, as most businesses do, you can hire a debt collecting agency to do the job for you. You also have the option of hiring an in-office debt collection team.

The first step in the commercial debt collection process is typically to issue a notice of delinquency to the debtor. If that doesn’t work for getting an account paid up, the requests and demands for the money owed get more and more aggressive and strongly worded. If all else fails, debt collectors can even bring cases to court in order to collect on the money owed.

Debt collectors generally do not want to have to settle a debt through litigation, which is costly and time-consuming. It’s much better for everyone involved if the debt is recovered before things get to that point. As such, most debt collectors use a variety of methods to try and get the money they are owed, such as phone calls, in-person visits, and warning letters.

It is important, however, for all debt collectors to operate within the bounds of the law. Debt collectors are not allowed to harass debtors, nor are they allowed to make any kinds of threats or intimidate debtors. There are also certain times when they cannot call debtors, such as very late at night. If they do, they can face litigation themselves and give the business they are representing a bad name.

If you are going to handle your debt collections yourself, it is imperative that you do so within the bounds of the law. And, even if you hire an outside agency to handle debt collection for you, you need to make sure they are scrupulous and abide by what the law says!   #CommercialDebtCollection

Interested in Debt Collections?

Are you interested in becoming a debt collector? There are many reasons why you might consider this career path. First of all, being a debt collector gives you the freedom to run your business and make money from home. Plus, all you really have to do is find customers and then work for them to collect their debts. Pretty simple, right? If you’re seriously thinking about making this the career for you, just follow a few basic tips.

Gain Experience First

The first and most important thing for you to do is to gain experience in the debt collection field. You don’t want to just start your own business without any training or real-world experience, so try getting a job at a professional debt collection agency first. Not only will this provide a way for you to earn experience, but it will also help you to decide whether this truly is the job for you or not.

Get the Necessary Education

In addition to having the right hands-on experience, you will also need to gain education and official training. A high school diploma is generally required for working at a professional debt collection firm. You should also take advantage of online training options, certifying organizations, and other training and educational opportunities that will assist you as you embark on this exciting career journey.

A World of Opportunity

Once you’ve completed all the necessary steps to become a debt collector and are employed, whether through a firm or your own business, you will find that all kinds of great opportunities and benefits await you. Debt collection is a constantly growing profession, so you’ll enjoy great job security and, as long as you do your job well, you should never want for clients. You’ll also enjoy regular interaction with others  and a great deal of freedom in when and how you work.

If you’re ready to become  a debt collector, there’s no better time to start working toward your goal than the present!

Small Business and the Debt Collectors Who Help Them

Small businesses are often the ones that suffer the most at the hands of debtors. Unfortunately, they are also the ones who tend to not hire collection agencies to try and recover their bad debts. 

A lot of the time, they think their business is too small to warrant working with a collection agency...even though, in reality, there’s really no such thing as being too small to recover debts owed.

Other times, they don’t realize how affordably priced many collection agencies can actually be. They wrongly think they’d never have the budget to cover collections, when in truth, the right collections agency could actually help to double their budget!

The trick to finding the right collection agency for a small business is to find one that is willing to work with small debts. Many collection agencies will actually go after any debt of $1000 or more; some will even work with smaller debts. You just have to find the ones that are marketed toward and willing to help small businesses.

After you’ve found a collection agency that is willing to work with you, just make sure it’s adamant about abiding by all debt collection laws, such as not calling debtors too often or at the wrong times. The last thing a small business wants to deal with is a lawsuit because its collection agency disobeyed the law.

You can greatly reduce the risk of legal trouble by choosing to work with a debt collection agency that belongs to the International Association of Commercial Collectors or the American Collector’s Association, both of which have strict standards for membership and ensure that all member companies obey laws and regulations.

As you can see, as long as you’re careful, there are many reasons why small businesses can and should hire debt collection agencies. Working with an agency is so much easier and more effective than trying to collect debts yourself, and it also keeps people from thinking negatively about your business and ruining its image and reputation. With so many excellent benefits to working with a collection agency, it’s definitely time to find the right one to meet your needs!

To Sue or Not to Sue

Dealing with late paying customers can be frustrating, especially when your efforts have gone unnoticed! Fortunately, you do have many options for collecting on what you’re owed. And, in the interest of pleasant customer relations, it’s best that you try out all of them before resorting to legal action. If you’ve tried all of the following to no avail, then it may be time to head to court:

l  Sending demands for payment/late notices, etc.                       

l  Phone calls

l  Working with a debt collection agency

If you’ve exhausted all of these options, then court may be an option for you. May is really the operative word there though. You should only head to court if you have all of the necessary documentation for proving your case. This includes things like a signed, dated, and properly notarized contract and proof that you have formally requested payments in the past.

If you do have enough to build a case on, you’ll need to look at the total amount that’s owed and use that to decide which court to go to. Smaller amounts may only be grounds for going to small claims court while larger amounts may be sufficient for a civil trial. In either case, getting a professional lawyer to actually do the legal work for you can be helpful and can make the process of collecting your money a lot more streamlined and simple.

The bottom line is that suing is not something anyone or any business wants to do. It’s a last resort option. If you’re given no choice but to sue, however, just make sure you go about it the right way to guarantee positive results.

The Disposable Customer

As a business, one of your main focuses is likely on getting new customers. However, there are some customers - lets call them “disposable customers”- whom you absolutely don’t want to do business with. These are the customers who have a bad history, a history of amassing debts with different businesses and never paying them. As the popular saying goes, the best predictor of future behavior is past behavior, so when you have the chance to do business with a “bad client,” there’s really no reason to give this person a shot.

How can you really find out about a customer’s history though? Does your business really have the Kinum, we can perform credit checks on all potential customers and give you the “go ahead” or the “run away” based on their past behaviors.

time to carefully search every potential client’s history? We’re guessing no, but luckily, that’s where we come in. Here at

It’s not just individuals who engage in this fraudulent behavior either. No, there are people out there who have a history of establishing faux-businesses, taking any profits they’ve gained, and running away with them or simply going out of business. To make matters worse, they often run the same scheme under a different name. So, this warning applies to you even if you work with businesses, not individuals.

To help you avoid these kinds of problems, make sure you’re working with a good collections company, one that will check, among other things, a potential client’s

l  Credit history

l  Web history

l  Domain ownership history

l  Business ownership history

Since many fraudulent people and businesses have been known to target the same vulnerable companies twice, you might even find that you’ve gotten burned by the same people before. The right collections company, however, can stop the burning and keep your business protected from further attacks.

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Dealing with Dispute Resolution

Anytime you’re dealing with the public, conflicts are going to arise. These conflicts and how you handle them have the ability to make or break your business. Most conflicts arise over things like why someone is refusing to pay, confusion or concern over how much is owed, and dissatisfaction with treatment or services. It’s easy to approach these conflicts with an “us against them” mentality, but that’s not going to get you very far. In fact, all it’s likely to do is to ruin relationships and your

reputation. As difficult as it may be, you should always be kind, respectful, and concerned whenever an issue arises with a client.

Because emotions sometimes get involved in these dealings, it can be hard to maintain a calm, professional demeanor.  For that reason, it is often best to let an outside company, one that specializes in collections and in “difficult dealings” with clients, handle these types of matters. The right company, such as Kinum, will discuss disputes with clients, look into client inquiries or complaints, and discharge unfair debts or work out repayment plans for legitimate debts.

A third party collections company can also separate the good from the bad, so to speak. It can alert you to which customers are uncooperative and difficult to deal with, as well as which customers are cooperative and doing their best to pay off their debts. That way, you can determine which clients deserve a second chance and which ones you no longer want to do business with. In other words, you’ll have an easy way to know which relationships are worth salvaging and which ones you need to say good-bye to.

As long as you handle the dispute resolution process carefully and with a little outside help to make it more manageable, you should be able to get through it without ruining any important client relationships.

Let Collections Help

When the bill is long overdue and a customer has yet to pay up, what should you do? Your first inclination might be to rant and rave and threaten legal action. However, don’t act too quickly. If you want to maintain a good relationship with the client and have a better chance of recouping all of the money you are owed, you should try a collection agency.   

Patience is a Virtue

Businesses depend on their clients paying up, so it can be very frustrating to wait for days and days past the due date. However, as hard as it may be, give your clients at least a month to pay up. If you turned the account over to a legal agency, you’d likely end up waiting at least that long, if not longer, so it really doesn’t do you any harm to wait. It can also end up strengthening your relationship with the client since it makes your business look understanding and professional. Plus, small things do sometimes happen in life that can make paying on time impossible for the client. Just keep careful track of how much time has passed since the original due date; letting bills go unpaid without consequence for too long can greatly reduce your chances of recouping the money you are owed.

Talk it Out

When a customer doesn’t pay as promised, refrain from making any assumptions about why the non-payment occurred. Instead, have someone from your business or your collections partner contact the client directly. Being respectful and straightforwardly asking a client why he hasn’t paid can go a long way to understanding what went wrong and how to remedy it. If you find, for example, that a long-time, usually reliable customer has hit an unexpected financial rough spot, you can be patient and work something out that will allow the relationship to remain intact. Or, if you find that identity theft or some other fraudulent activity is the reason for the non-payment, you can avoid wasting time, energy, and money on activities that won’t show any results. Finding out what’s going on firsthand, in any case, can provide you with valuable information about the best way to proceed.

Slowly Turn Up the Heat

What if you’ve tried talking to the client and have sent more than your fair share of “gentle reminders?” Unfortunately, this does happen, and that’s when you have to start ‘turning up the heat” through a careful process known as escalation. Once your customer realizes you mean business, they may get to business and resolve the debt.

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