How NOT to Deal with Debt collectors

For most people, there is nothing worse than picking up the phone to find a debt collection agency representative on the other line. If, however, a debt collector does call, it is extremely important to handle the call the right way. In fact, there are many things that people should NEVER do when they get a call from a debt collector.     

Avoiding the Call

To start off with, one of the worst things that a delinquent consumer can do when a debt collector calls is to just plain ignore the call. This is NOT going to make the debt go away and will only make matters worse. Plus, if debt collectors are ignored for long enough, debtors could find themselves in court facing legal action.

To avoid more serious consequences, consumers are advised to answer those collection calls and to deal with them maturely. They should assemble any information they have on the debt and consult this information as they speak with the debt collector to ensure the debt is accurate and to work out a realistic repayment plan.              

Not Knowing Their Legal Rights

Another big problem comes when consumers are uninformed and unaware of their legal rights. For example, in many states, a debt can no longer be collected on after it is five to seven years old. If consumers don’t know this, they could end up paying on debts that they don’t actually owe, at least according to the law.

To avoid situations like this one, debtors should know the laws in their state and exercise their rights when possible and favorable to do so.

Not Asking for Debt Verification

Finally, when contacted by debt collectors, consumers should ALWAYS request written verification of the debt. It is within their rights to do so, and consumers want to ensure that the debt they are being asked to pay is actually their responsibility.

Once verification is received, the consumer will know whether or not the debt is valid and can then take the proper steps accordingly.

Obviously, a lot of errors can be made when speaking with a debt collector, but as long as consumers know their rights and what to do, everything should go just fine and may even lead to a successful resolution of the debt that will make both parties happy.

Why You Should Work with a Debt Collection Agency

When it comes to collecting on client debts, you should know that you don’t have to do all of that hard work on your own! Fortunately, there are professional collection agencies that can take care of debt collections for you, leaving you to tend to other aspects of running your business. Also, professional collection agencies often have the most success in collecting debts, which can help your business to keep running and to stop losing (as much) money.

Another major benefit of hiring professionals is that, when accounts escalate to the point where legal action is needed, they’ll handle that daunting part of the process too! That means you don’t have to waste time and money filling out countless amounts of paperwork and sitting in a courtroom. 

Finally, anther benefit of collection agencies- at least the good ones- is that they don’t keep you in the dark throughout the debt collection process. On the contrary, many of them actually make your accounts accessible online so that you can easily see how much success they’re having, the status of individual accounts, and other important information, allowing you to maintain control of your business.

The trick is just to hire the right collection agency. Look for a reputable agency with good reviews that is fully licensed in your state and that makes its pricing structure clear from the get-go. Then, during the early stages of working with a collection agency, carefully monitor everything it does and be mindful of any client complaints so that you can ensure the agency is doing everything it promised and doing it well!

As long as you make a smart hiring decision, there’s no reason you shouldn’t have great success working with a collection agency.

Understanding Debt Collection Laws

Debt collection agencies and the businesses and professionals who use them are subject to many rules and regulations about how they must treat debtors. When debt collection agencies overstep their boundaries or disobey the law, they can be penalized through litigation, formal complaints, and the like, all of which are bad for the companies they represent. That’s why it’s so important for all businesses that choose to work with a collection agency to choose the most reputable, quality one they can find. Good collection agencies know and follow all the regulations that are currently in place, check and double check their workers for compliance with these regulations, and always treat even the most serious debtors with respect.

Picking the right collection agency, one that abides by all required regulations, isn’t so easy if you don’t know what the regulations are. While there are all kinds of laws and rules that affect the debt collection industry, a few of the more important include:

The Fair Debt Collection Practices Act

The laws established by this act dictate when, how, and how often debt collectors can try to connect with debtors. The laws also dictate what information can be revealed through communication, what information (disclosures) must be revealed, and the manner in which the call and the person on the other end of it needs to be handled.

The Fair Credit Reporting Act

This act created laws surrounding the sensitive information that is often revealed in debt collecting. This act determines when debts can be reported to the big credit bureaus and how credit will be affected, but it also deals with how to keep sensitive, private information sensitive and private.

The Telephone Consumer Protection Act                         

Finally, the telephone consumer protection act determines how debt-related phone calls must be made and handled. Laws created by this act dictate that the nature of collection calls must be reported prior to the start of the conversation, for example.

The laws and acts discussed here, and others like them, were all designed to protect the debtor. There really aren’t a lot of laws in place to protect businesses or collection agencies. That’s why the two have to stick together and why businesses must be selective about the collection agencies they choose to work with.

Related articles

• Collecting Past Due Payments From Clients (moz.com)

Your Small Business May Need Help with Debt Collections

Every business, no matter how large or how small it is, at some point, is dependent upon the profit it brings in in order to survive. Many small businesses think that they are too small to work with a collection agency, but that’s not the case at all. In fact, small businesses are the most reliant on their profits for day-to-day operations and the most in need of collection agency services. While it is true that some debt collection agencies won’t handle or work with smaller accounts, there are some out there that will. Choose these agencies to represent and assist you and your business; you need them, whether you realize it or not.

You Deserve Your Money                             

When you provide a product or service, you deserve to be paid for it, plain and simple. If you agree with this basic principle of business, then there’s no reason to tell yourself you shouldn’t work with a collection agency. Nowhere in that principle does it say that only businesses of a certain size are entitled to their profits, so why would you assume that, based on size, you don’t deserve to recuperate what is rightfully yours? You say you believe that when you choose not to work with a collection agency.

All Debts Matter

Another common reason (excuse!) people often give for not hiring a collections agency is that their debts are too small to bother with. Thinking that way is a dangerously slippery slope, however. Sure, one or two debts might not matter in the grand scheme of things, but what about ten or twenty? The bottom line is that if you left a few debts slip through the cracks unpunished and uncollected, where do you draw the line? At bankruptcy when it’s too late? Don’t let things get to that point. Let every debt, even the small ones, count and be accounted for!

So Much More

Finally, it’s important to remember that the term “collections agency” is, or at least should be, a misnomer. The right collection agency will actually be a collections service, meaning it will do more than just collect money from delinquent clients. The right collections service is focused on customer retention, meaning it will help you to know which clients you should go after hard and which ones are worth another chance before you send them over to collections, thus protecting your relationships and your reputation, two of the most important (and intertwined) assets you have. Smart collections services will also background check clients, letting you know who to do business with and who to stay away from.

In the end, the question isn’t whether or not you are “too small” to hire a collections service: no business is. It’s simply a matter of hiring the right service, such as Kinum, to meet your needs.

Related articles

• The Surprising Truth About Business Debt Collection (fundinggates.com)