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.

What to do When Debtors Can't Pay

In today’s world, the vast majority of consumers have more debt than they can realistically handle. Many of these debtors, try as they might, cannot find a way to live beneath their means. They often rely heavily on credit cards and other high-interest financing options to pay their required bills. And, while such options may provide a short-term “solution,” they eventually lead to even more bills and more debt, continuing the vicious cycle of non-payment.   

Many third party collection agencies find that, when they call to talk about a client’s account, the client says he can’t pay the bill…and is telling the truth. So many consumers are just so deep in debt that they feel like they have no options. That is where a debt collector can step in and help the debtor to find potential options to pay off his debt. One of the best of those options is online peer to peer lending.

Online peer to peer lending is a vastly growing enterprise, one that earned about $5 billion in loans in the past year alone. And, while there are many peer to peer lending platforms, two of the best and most widely used are Lending club and Prosper, both of which offer loans up to $35,000 with three to five year repayment terms. The interest rates also tend to be quite low, making these online loans a viable and convenient option for consumers who want to pay off their debts with one big payment and then just focus on repaying a single loan, which most find much easier and more convenient than paying several bills at different times each month.

Such loans are not just useful for paying for debts either. Some peer to peer platforms offer loans for mortgages, student loans, and more. Debt collectors, however, don’t necessarily want to encourage people to take out more debt, though they may want to consider mentioning peer to peer loans as a viable option for paying off current debts, especially since such loans have so many advantages.

Some of the advantages of such loans that debt collectors may want to share with debtors include:

·         Fixed interest rates

·         Longer time to repay the loans (3 to 5 years, as mentioned above, is average)

·         No pre-payment penalties

·         Easily, quick, fully online application process

·         Automatic deductions for payments

·         Assets are protected

If a client becomes interested in one of these loans, his next question tends to be whether or not he is eligible. Fortunately, there are very few requirements that must be met in order to qualify for a loan from a peer to peer site. Debt collectors can inform clients that the general requirements include:

·         Being a United States citizen or permanent resident

·         Being 18 years of age or older

·         Having a FICO score of at least 600

·         A debt to income ratio below 35%, mortgage not included

·         At least three years of credit history with no current delinquencies or recent bankruptcies

·         Six or fewer credit inquiries over the last six months

·         Two current revolving credit accounts

Meeting each of these requirements is not a guarantee of approval, so debt collectors should not make any absolute statements or promises to consumers, but they can inform them of this option in hopes that the debtor will qualify for such a loan and use the money received to pay off debts.

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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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.