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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Accounts in Collections

When a person doesn’t pay a bill on time or at all, the related account often goes over to collections. Once this happens, the consumer’s credit score is negatively impacted, and other problems and

challenges can arise. For this reason, it is extremely important that consumers do everything they can to keep their accounts out of collections. When that doesn’t happen, however, then they need to be aware of how being in collections will affect them so that they can mitigate the damage as much as possible.

For those confused about what exactly it means to be “in collections,” this simply means that the original company that the consumer borrowed from or purchased a product or service through has written off the debt as a loss. In order to recuperate some of the cost, the company then sold the consumer’s debt to a collection agency, which will attempt to collect on the money and profit.

Every company has its own policy regarding when it sends accounts to collections. However, generally, after 180 days of non-payment, most creditors will send accounts to collections. Soon after, the consumer’s debt will often appear on his or her credit score

Once an account is in collections, this can lead to a serious drop in the person’s credit score. And, even a good score typically can’t survive having an account put in collections. In fact, the higher a person’s score is when the account goes over to collections, the more likely it is to drop significantly as a result.

Another big problem with having an account go over to collections is that this will typically mean owning even more on the debt than was previously owed since most collections agencies will assess additional fees and charges for handling the debt.

What to Do

When a consumer has a debt go over to collections, the first thing he or she should do is determine whether or not the debt is accurate and has been accurately reported.

If so, then consumers are advised to try and work something out with the collection agency to pay off their debt and bring their credit scores back up.

If the information reported is incorrect, consumer can file a complaint with their credit bureau.

No matter what the outcome or situation, it is important for today’s consumers to understand the truth about collections accounts and how they can negatively impact their lives and their credit.

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The Art of Successful Debt Collection

It’s no secret that some debt collectors are a great deal more successful than others. What is a bit of a mystery, however, is why? Why are some people so good at getting debtors to “pay up” while others just get hung up on over and over again?

While it’s likely that there will always be some mystery related to this question, a recent report from LinkedIn finds that debt collection agencies often (wisely) look for certain key traits in debt collectors, including the following:   

·         Perseverance and dedication; in other words, they don’t give up easily

·         Calm and collected, even under pressure

·         The ability to “brush off” personal hurts or insults

·         Independent

·         Goal-oriented

·         Self-motivated

·         Organized

·         Skilled at multi-tasking

The interesting thing about the above characteristics is that they’re the kind of thing that people either have or don’t have; there’s really not much middle ground, and, furthermore, they’re the kind of qualities that people CAN work to develop but that, for the most part, are simply inborn or not present.

This does not mean, however, that people who do not have all of those qualities cannot make good debt collectors. No, on the flip side, the amount of training, education, and experience a person has can really make a big difference and can also make up for lacking some of these skills innately. Important areas of training that can be beneficial to debt collectors include:

·         Customer service training

·         Education in company policies and procedures

·         Familiarity with claim research and other debt collection tasks

·         Skip tracing training

In truth, the answer to whether debt collectors are “made” or “built” is probably a little bit of both. Very few collectors have all of the inborn skills in the first list, and very few have all of the training and experience found in the second list. If, however, collectors can just have a little something from each list, then there’s a pretty good  chance that their natural and learned talents will come through and help turn them into prosperous debt collectors.

Skip Tracing: What Every Collection Agency Needs to Know

These days, there are many tools available to help collection agencies and business owners garner information and find consumers who are hard to reach or who may even purposefully be dodging them. However, despite the many technologies and resources available in today’s world, debt collectors are somewhat limited in terms of how much they can do because they must always operate within the bounds of the law and with the Fair Debt Collection Practices Act and its specifications in mind.   

For example, even though debt collectors could easily use the internet to determine the closest friends and/or relative of a debtor and then contact that person for information on the debtor’s whereabouts, there are limiting laws in place, such as one that says debt collectors can only communicate with third parties with the intent of collecting location information one time!

Debt collectors can, of course, resort to “sneaky” tactics, like garnering information from other companies, checking with the county tax assessor, and looking up utility records. However, these types of practices take a lot of time and money, both of which most modern businesses and collection agencies can’t afford to waste. Fortunately, though, there is an easier way.

There are many companies that offer skip tracing services for a nominal fee and that will do all the hard work of chasing down “disappeared” clients. Before using a skip tracing service, however, there are things to consider and questions to ask.

Compliance Counts

First of all, it is imperative that any skip tracing service is fully compliant with all state and federal regulations. This means that companies should only work with licensed, insured skip tracing services that have a track record of compliance when it comes to skip tracing.

Smart businesses may even want to have their skip tracing services sign compliance contracts, guaranteeing to maintain compliance, before entering into business with them. That might sound extreme, but businesses these days can never be too careful when it comes to protecting themselves from litigation due to non-compliance.

Consider the Cost

Once businesses are sure that they can maintain their integrity and avoid litigation when working with a particular service, they’ll want to think about more practical matters, such as how much the skip tracing service will cost, and whether or not the cost is worth the return.

There is no way to fully predict how effective a skip tracing service will be, but businesses can inquire about the success rate of services they are interested in and determine, from there, whether or not they think a skip tracing service is a worthwhile investment.

If businesses do try out skip tracing, they should keep careful track of how much money the service garners them in income versus how much they spent on it, and, if things don’t balance out, then they may want to rethink using skip tracing services or to at least find another service.

Professional, out-of-house skip tracing isn’t for every business, but each business should at least consider it and whether or not it’s the right fit.

Times are Changing in Debt Collection Services

While many people cite the position of “debt collection services” as one of the world’s most difficult, few people stop to think about someone who has it even rougher- the manager or owner of a debt collection firm. These are the people who truly take the hit when compliance issues occur or when an employee does not act in accordance with the law. And, in this day and age, where it’s all too easy to not meet the demands imposed by clients and where everyone is having a hard time paying off old debts, it’s not at all uncommon for debt collections agencies to suffer severe financial problems and sometimes even to have to close their doors.            

While debt collection companies of all sizes and across a wide range of industries are being affected by the current state of things, smaller and medium sized agencies are suffering the worst, especially within the medical sector. Smaller medical organizations are merging with or being acquired by larger ones, and these large conglomerates tend to go with large, well-known debt collectors, putting the “little guys” out of business when they do.

For collection agency owners who have had to watch their businesses suffer as a result of this type of situation or a similar one, there are options. In some cases, though, the best option may not be the one that seems the most desirable. Sometimes, though, the best deal smaller collection agencies can hope for is to merge with larger ones, in the same way that many medical facilities are merging with larger corporations.

Staffing changes can sometimes be the answer as well. Hiring better, more aggressive collection agents with years of experience can sometimes help to improve earnings in the long run and help collection agencies to stay afloat.

The fact of the matter is, though, that the face of the collections industry is changing. Instead of smaller, independently owned companies, larger organizations are gaining favor. This doesn’t necessarily mean that all collection agency owners have to close up shop, but it does mean that they should have a backup plan in case things go awry and that they should be actively looking into possible solutions for downturns in profits or other common problems they are likely to experience.

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Compliance Concerns and Solutions for Debt Collectors

Debt collectors have an extremely tough job. Not only do they have to deal with troublesome customers, customers who can sometimes get irate, but they also must deal with compliance issues on a regular basis. Complying with federal and state regulations is a must for debt collectors. And, in addition to being compliant, they also have to have success with their main goal, which is, of course, collecting on bad debts.  All of these responsibilities and demands can add up to very difficult work for today’s collectors.                              

Consumer Identification

One of the main demands on debt collectors is that they must first confirm the identity of the consumer to whom they are speaking. Debt collectors must confirm the first and last name of the consumer to whom they are speaking, as well as another verification point, such as the person’s social security number, date of birth, or address.

And, while that type of confirmation may seem simple enough, debt collectors often have questions about how to go about the confirmation process. Should they request the information from the consumer, or should the debt collectors provide the information and have the consumers confirm it?

Not only it is difficult to determine the best approach, but there is also the concern of fewer and fewer consumers being willing to provide or confirm identifying information. There is a real concern over identity theft and fraud in modern times, so it is not surprising that consumers would be more cautious about providing sensitive information over the phone. However, when consumers fail to provide or verify information, the collection call cannot continue, which is obviously a major problem for modern debt collectors.

For this reason, collections companies or departments are urged to create an Identification of Consumer policy. With such a policy in place, every employee would have clearly outlined steps to follow regarding the consumer identification process, ensuring that no rules are broken and that, should a confirmation not be received, the collector will not be punished or faulted, providing he or she followed the required steps as outlined in the policy.

Matching Up Company and Client Expectations

The solution discussed above, of having company-wide policies related to different compliance requirements, is a wise one that can be adapted in many areas of a company’s functioning. However, it is important to consider that some clients will have their own expectations and policies that they will expect debt collectors working for them to follow.

When this is the case, it is always best to follow the client’s expectations, regardless of any company policies that may exist. The easiest way to honor client requests is to have separate teams for each client and to ensure that all team members know the special policies required of them for this particular client.

When companies are unable or unwilling to have separate teams for each client, the policy should be to review any “special notes” or “client regulations” before making a collections call. Companies that have special requirements could be denoted in some way in the company’s computer system.

These are just two of many concerns that exist for today’s debt collectors, but as is evident, solutions can be worked out if companies are just willing to develop plans and strategies that work for both them and their clients.

Keys to a Successful Collections Call

For the debt collector, what happens on a call can mean the difference between getting fired and a successful career. Debt collectors, as you probably already know, are under a lot of pressure to get a client talking and to ultimately get a payment or a partial payment out of him or her. In some cases, collectors can even be fired or get a pay cut for not having as many successful collections as usual, which is quite scary when your livelihood depends upon it.   

If you are a debt collector, however, you can (hopefully!) breathe easier with our simple tips. And, the most important of those tips is to understand that your ability to either increase or decrease the likelihood of a payment happening on your call all depends on how you approach the call from the very beginning.

To start with, you should always begin the call in a friendly, conversational manner. Yes, some debt collectors find success with being aggressive and demanding from the get-go, but if that’s not your style, just try being friendly and personable from the start. Instead of diving into the collection matter at hand, why not ask the consumer about his or her day and try being friendly? You’d be surprised at just how much this tactic puts the consumer at ease and makes him or her more likely to make a payment.

Take the time, of course, to go through protocol and make sure you are speaking with the correct person, but do your best to make this seem like a mere technicality or, even better yet, an even, natural part of the conversation. This does take some skill, but maintaining an easy and relaxed vibe can go a long way in getting the consumer to make a payment.

Furthermore, do everything within your power to make the consumer feel safe and comfortable. The more comfortable he or she is, the more likely it is that the consumer will divulge information that will help you to eventually collect on the account.

Of course, in all that you do and everything that you say and no matter how “nice” you are, always keep state and/or federal regulations in mind. As long as you follow all of the legal rules and our tips as well, there is no reason that you can’t have a long and successful career as a debt collector and that all, or at least the vast majority of, your collections calls can’t be successful.

Being a Collection Agent

Being a collection agent is tough. This is a fact you undoubtedly already know, probably all too well. There’s a good chance that, when you call a client, you follow a long and very precise script. However, recent research, research which considers collections related laws, has found that going through all of the motions isn’t always necessary or even beneficial. Instead, you really only need to focus on gathering certain, specific pieces of information about each account, and, in general, as long as you have those, you’re in the clear.   

Of course, before you can even begin to follow these tips, you have to check with your supervisor to make sure he or she agrees with your methods. More standardized, old fashioned collectors might not agree with what the more recent research shows, but if you have a supervisor who is willing to “grow with the times,” you might just be okay, or at least able to convince him that the newer moves are the best moves.

And, when we speak of “new moves,” it’s really not like they are anything sinister or outrageous. Instead, you’re simply encouraged to review all information and records you have on the client. The more you know about the person you are attempting to collect from, the better you can work with him or her and the more sympathetic and understanding you can appear to be.

Of course, in all of your “sympathy and understanding,” never, ever forget state laws! Each state has very specific laws in place as to how you can deal with and speak to debtors, when you can call, and what your conversations must consist of. Use what you know about each client to give you a “leg up,” but always keep those basic rules first and foremost in your mind.

The bottom line is that, as a debt collector, you should access and use every helpful piece of information at your disposal to garner information about the debtor, and, from there, you should use what you know to get on the “good side” of the debtor and to get him or her to make a payment. However, in all that you do, you should keep the rules and regulations in mind and put those first. If you can follow these tips, then there is an excellent chance that you’ll have a higher success rate with your debt collection efforts.

Collection Notices: Style Matters

Collection notices can be tricky. There’s a good chance that people aren’t even going to open up the envelope and see the notice. And, if they do open it, once they realize it’s a collection notice, many people are apt to just toss the notice out without really reading it. To get around this and make it more likely that people read these notices, many debt collectors will use large fonts, bold texts, or bright colors to try and draw attention. What a lot of debt collectors don’t realize, however, is that, in some cases, they may be violating compliance laws by resorting to these tactics.

It’s sort of a thin line to walk, but if it can be proven or argued that the use of bright colors, out-there fonts, or other such “attention-attractors” confuse or mislead the receiver in any way, the debt collection agency that sent the notice could find itself in trouble. In fact, some states even have their own very specific laws about which font sizes, text colors, and the like can be used, so before you embellish a collection notice with any “special touches,” brush up on state law.   

Believe it or not, over the years, the Fair Debt Collection Practices Act has dealt with many complaints related to font sizes, colors, and other such stylistic issues. In one case, for example, a company got in trouble for making threatening statements bolder and easier to read than statements related to the consumer’s rights. If you don’t want to find your stylistic choices called into question and potentially becoming a cause for complaint, then it’s best to follow a few guidelines for all of your collection notices.

To begin with, you’ll probably want to avoid placing any requests for money or information about what will happen if a debt remains unpaid in bold fonts or in bright colors. Doing so could potentially be seen as you trying to “overshadow” the consumer’s rights, which also must be printed on the collection notice. The validation notice required by the Fair Debt Collection Practices Act should be very clear and easy to read and should not be smaller in size than any other part of the notice in order to avoid complaints. Furthermore, if you intend to put the validation notice on the backside of the letter, there must be text that directs the consumer to where to find this notice. The bottom line is that this notice cannot be hidden or obscured in any way.

Finally, as mentioned, there are specific laws governing font size and other stylistic choices that vary from state to state. As such, before you send out any letter, it’s best to check the laws for your state and/or the state where the letter will be sent to ensure that you are in full compliance with the law.

Should You Stay or Should You Go?

Collection agencies have a tough job. They work for companies doing the jobs that those companies don’t want to do- attempting to collect debt from delinquent clients. Sometimes, collection agencies are successful in their efforts and sometimes they’re not. The problem, however, is when they’re being paid based on their success alone. For them, that means that a client who refuses to pay could mean a lack of income. That’s why collection agencies really have to watch their bottom line and regularly evaluate whether working with a particular client is worth it or not.

Making a Match   

It’s not just the collection agencies who have it rough. Companies, too, have to work hard to find the right collection agencies to work with. If both can do their part, though, a lot of future problems and issues can be avoided. That’s why making the right match early on is so important.

Creditors and collection agencies both need to be upfront about their goals and how they will be accomplished. Creditors need to ensure that their collection agencies are following all the laws and regulations in place for collection agencies, and agencies need to make sure that they’re working with and for clients who will appreciate and stand by them.

Long before creditors and collections agencies ever agree to work together, it’s imperative that the two sit down and make sure they are in agreeance on how things will be done. From there, it’s easier for the collection agency to look out for itself and still make sure it is meeting the creditor’s requests.

Staying in the Know

Once a relationship has been formed between creditor and collection agency, the collection agency regularly needs to evaluate if the partnership is remaining beneficial for both.

Collection agencies also need to stay “in the know” when it comes to what their clients are doing because it will affect how the agency can and should do business. Collection agencies should be informed of consolidation of offices, system conversions, procedure changes, administrative changes, and any other changes that will or could affect how the collection agency collects debts. If the creditor is not doing its part at keeping the collection agency in the loop, the relationship is not going to work.

When to Walk Away

Sometimes, no matter how hard either party tries, however, it is best to end the professional relationship, and it’s important for both parties to know when that should happen. When there doesn’t seem to be a solution to an ongoing problem and all other strategies have been tried to work things out, then it’s usually best to part ways.

However, collection agencies should always strive to part ways with their clients amicably. This could lead to a future relationship if the creditor changes its needs or goals in the future. At the very least, it can lead to a good reference.

Collection agencies should never just leave creditors in the lurch either. They should always plan to part ways well ahead of time and leave time for the creditor to make other arrangements.

When both parties act professionally and fairly, everyone can come out on top even if a particular relationship isn’t a perfect match.

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Info Regarding Government Debt Collection

There’s some recent news that might come as a shock to you, and it’s the fact that government agencies have really been cracking down on collecting debts, and we mean all kinds of debts. They have been hiring private debt collection agencies to go after consumers for everything from old parking tickets to missed tolls and taxes. So, unless you’re a perfect angel, you can’t be sure you’re 100% safe from some type of collections efforts on behalf of the government.  

The reason that government agencies are doing this is pretty simple: money. Many states and cities are finding themselves broke and desperately in need of funds, which they’re trying to secure, a little at a time, by going after even the smallest of unpaid debts.

Furthermore, there’s really no good reason for government agencies NOT to go after these debts. It has been discovered that the government can outsource collections, which means little time or effort on their part, and they can allow outsourced agencies to tack on their own collection fees, allowing debts to be collected at no cost to the government agencies.  #DebtCollectionPractices

Debt collection agencies working for the government also benefit since they’re not subjected to the same tight laws as other agencies. They can add on higher fees than non-government contracted agencies and make (and carry out) serious threats, such as suspended drivers’ licenses and garnished wages. Of course, penalties and fees do vary from state to state, but in general, government-contracted debt collectors have more leeway in their collection practices.


So, if you’ve got unpaid debts lurking somewhere in your past, your best bet is to get them taken care of now. If you don’t, don’t be surprised when a government-contracted collection agency calls your phone, demanding what you owe and then some!

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Debt Collection, Callbacks, and Voicemail: The Rules Clarified

As you probably already know, debt collectors have to follow very strict rules and protocol when it comes to collecting on debts. In fact, back in July, the New York City Department of Consumer Affairs added clarification to some very specific rules related to the debt collection process and how it must be handled.   

This issuance came in response to some direct questions related to how long a debt collection agency had to answer a phone call from a consumer with a human answerer and on whether or not customers could be asked to leave a voice message.

The answer to the first question is only two minutes or 120 seconds; when debt collection agencies are contacted, a real, live person, not a recording must answer the phone within that timeframe, and, as for the second part, consumers may not be asked to leave a message in lieu of speaking with a real person.

The New York City Department of Consumer affairs also took the time to add further clarification to some similar issues. This included the fact that all debt collection agencies must offer a call back number that will be answered by a real person, or, in the case of call re-routing, that all calls be routed, within the proper timeframe, to a real person.

As you can see, the rules and laws surrounding debt collection are strict! Make sure your business is following all of them to avoid litigation and other trouble in the future.  #DebtCollections #Kinum

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How to be an Effective Debt Collector

Are you interested in becoming a debt collector? Whether you want to be one to assist with collecting owed money for your own business or as a career option, there are all kinds of training and certification programs available.

Debt collectors are very important assets to modern businesses, and, as such, these professionals tend to be highly sought after. Debt collectors can work at their own businesses, in offices, or even from home. If you’re interested in becoming a debt collector and want to be the best debt collector you possibly can be, read on to learn some super helpful tips for reaching your goals.

Tip #1: Gain Experience

If your dream is to strike out on your own as a debt collector or to work from home, it’s imperative that you get some real-world, hands-on experience first. See if you can get hired at a money-collection agency where you can learn the ropes, get

some real practice, and get on-site training as well.

Tip #2: Get An Education

You might not think schooling is necessary for debt collectors, but most jobs in the field require their new hires to have at least a high school diploma. It’s even better if you’ve taken online debt collection training or, still better yet, have gone to a training program or school for debt collection or a related field. Getting an education will not only give you knowledge you need to do your job well, but it also shows prospective employers that you can work hard, finish what you start, and commit to and reach goals you set for yourself.

Tip #3: Love What You Do!

Finally, it’s important to know that debt collection is stressful and difficult. It requires you to deal with people, some of whom will be less-than-polite, on a regular basis. In order to deal with the “downs” of the job, you have to make sure you really love what you do. Try it out, and make sure you are truly passionate about the field before you make it your lifelong career. If it does turn out that you love it, you’ll enter into a booming field where there is always work available for those who are willing to work hard and always strive to do the best job they possibly can. If that describes you, then you should have  nothing but success in this field.  #Kinum  #DebtCollection

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Think You Don't Need Help in Debt Recovery?

If you’re under the impression that your internal credit control department is every bit as good and effective as an outside debt collection agency, you may just be leaving money on the table!

Nine times out of ten, actual collection agencies are much, much better at getting you the money you’re owed. They can also save you money and time.

You also have to keep in mind that, despite their name, debt collection agencies usually do a lot more than just getting people to pay up. Most agencies can also handle litigation if a debtor is taken to court, do credit and background checks on potential employees or clients, provide information about companies you are considering working with, and more. Having a service to take care of all of these needs for you is incredibly convenient.  

With these awesome benefits, you may be wondering why a lot of people shy away from hiring collection agencies. The reason, more often than not, is because of the “shady” reputation many collections agencies have gotten in recent years. While it is true that some debt collection agencies reduce themselves to illegal “scare tactics” to try and collect on debts, the vast majority of them are fully licensed, follow all the debt collection rules, and have insurance to protect you in case they don’t. As long as you choose one of these good agencies, you should have a very positive and helpful experience.

To ensure you do make a smart choice, always do some “checking up” on any debt collection agency you are considering working with. Check out an agency’s standing with the Better Business Bureau and read customer reviews online before you commit to anything. If you do choose the right agency, you’ll enjoy reduced costs and increased profits, which are the two things every business hopes for.

A Positive Transaction with a Debt Collection Agency

No business owner likes to think about sending an account to collections, but, unfortunately, this is something that, all too often, has to be done. The good news is that there are a lot of good collections agencies out there, ones you can count on to act responsibly in your name and to get you the money you are owed.

However, not all debt collection agencies are all they’re cracked up to be. To avoid wasting time and money, make sure you follow our tips for choosing the right collections agency to meet your needs.

Find the Right Fit                         

First things first, you need to make sure you find a collection agency that is equipped to meet your specific needs. Some agencies, for example, specialize in working with larger companies while others are more skilled at dealing with small businesses. It’s important to do your research and to choose a collections agency that has worked (and worked well!) with businesses like yours in the past.

Make Sure They Can Track Down Debtors

Another important thing to look for is an agency that has the power to track down debtors who change contact information, such as addresses and/or phone numbers. The best and most effective collections agencies have access to and are adept at using “skip tracking” technology. With this feature, they can access all of the major debtor databases and find those who owe you money...no matter where they go.

Find an Agency that Knows Its Stuff

All debt collection agencies are required to act, at all times, in accordance with the laws and regulations set forth by the Fair Debt Collection Practices Act. No matter what you do, choose an agency that is familiar with these rules and that doesn’t have complaints filed for acting against them (you can view complaints and other problems through the Better Business Bureau). Your business could end up facing litigation if your debt collector doesn’t follow the laws, so this tip is of the utmost importance.

Ensure They Have Insurance

You also want to make sure that your debt collection agency is backed by insurance. That way, you’ll be protected in the off-chance that all your good planning and research fails, and your debt collector does violate a Fair Practice law.

Consider Your Budget

While it’s important to get the highest possible quality of service, you also have to be practical and think about your budget. Always ask a debt collection agency upfront about its fees. Some agencies just charge an upfront fee to work for you while others only charge if they actually collect on accounts. In either arrangement, you need to carefully consider the possible costs and do a little comparing to find the right collection agency to meet your needs.

If you can keep these tips in mind and follow this advice closely as you choose a collections agency, there’s no reason you shouldn’t have a positive experience and get great benefits from using your agency.

Why Debt Collectors and Quotas Don't Mix

There’s an organization devoted to protecting America’s consumers, even and perhaps especially those who are delinquent in their bills. That organization is known as the Consumer Financial Protection Bureau (CFPB), and it has received almost 80,000 complaints about debt collection agencies- complaints that reflect badly not just on the collection agency but on the company that hired it in the first place!

Why so many complaints? Well, some (but not all) collections agencies give their workers quotas that they must meet in order to earn money. As such, these workers will do anything within their

power to collect on a debt. Because they’re focused only on collecting and not on maintaining good relationships with customers, they resort to tactics like bullying, constantly calling debtors, and being purposefully intimidating or even threatening, which only serves to hurt both customers and the businesses the collections agencies are working for.

As a business owner, you don’t want to ruin your reputation by working with a bad collection agency. Nor do you want to potentially face a lawsuit based on the agency’s use of illegal collection tactics, as has happened to other businesses in the past. As such, you should be very careful about the debt collection agency you choose to work with. For starters, pick one that doesn’t force its employees to meet quotas to stay employed!

You may also want to consider working with a collections service that uses only automated and fully-compliant debt collection tactics. With these services, there’s no room for human error. Of course, there’s also not room for that human touch.

If you don’t feel that choosing an automated debt collection service is right for you and your business, then choose one that has the same outlook on customers and on customer retention as you do. Look for one that treats all clients, regardless of their payment history or lack thereof, with respect and that is as focused on maintaining your business’s good name as it is on collecting debts. If you can choose a service with these tips in mind, then you should be able to collect funds risk-free.

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.

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Myths and Truths about the Debt Collection Industry

Debt collection is an industry that gets an unfairly bad reputation. A lot of what people tend to believe about debt collection is just plain not true. For example, there’s a pretty good chance you’ve heard the following myths about debt collection agencies:

l  Debt collections agencies scam customers; they buy debt for mere pennies and then try to recoup large amounts of money from debtors

l  Debt collectors harass and threaten clients in the hopes of getting paid   

l  Debt collection agencies face very few, if any, regulations, and many operate illegally

None of the above statements are true, especially that last one. Debt collectors, who can be employed by any business, company, or professional that’s having a hard time collecting on owed funds, are actually quite heavily and strictly regulated.

They are governed and watched over carefully by regulations of the Fair Debt Collection Practices Act, which ensures that debts are collected fairly and without undue force or coercion. They are also under the regulations of the Telephone Consumer Protection Act, which governs how customers must be dealt with over the phone, and the Fair Credit Reporting Act, which ensures that all customer information is treated securely and responsibly.

It’s important to understand that while some debt collection agencies buy debt, others do not work that way. They simply try to collect debts for other companies or organizations without actually purchasing the debt themselves. So, many debt collection agencies are actually just in the business of collecting money that’s owed for the person to whom it is owed. They’re not, as so many people wrongly believe, just trying to make a nice profit on the debt they’ve purchased.

Remember, businesses help the world and the economy to operate. When people don’t pay their debts, these businesses, and thus, the economy suffers. Collection agencies are doing their part in the “economic cycle” by helping to collect on owed debts, and it’s not fair for them to be treated like “the bad guys” of the business world.

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.

Debt Collection and Kinum

It’s important for today’s commercial debt recovery specialists to keep their clients “in the green”.  During the collection process, we realized the simplest way to accomplish this is to treat the debtor with respect.  Kinum does not allow intimidating practices. Instead, our focus is to make a connection, listen and create an amicable, realistic resolution.  We learned you don’t look good by making others look bad. 

Debt collection is an art.  It is the culmination of problem solving skills and negotiation. While it’s true that the older the debt, the harder it is to collect.  It’s also true that when a debtor is approached in a professional manner, the chances of resolution are greatly enhanced.  Gone are the days of robo-calls and/or rude collector personnel that begin the process with a negative tone.  At Kinum, we researched our competitors, took their best practices and made them better.  We also learned, in no uncertain terms, what does not work and why our industry has a blemished reputation.   

This is not to say that Kinum is “soft”. Nothing could be further from the truth.  Our collection methods are stern, yet in a in a skillful manner.  Our goal is to collect the debt owed to you, yet also be a relationship manager between your company and your late paying customers. We help businesses achieve debt recovery solutions without creating a professional breach with the parties involved. 

Kinum delivers results. If a debtor is contacted by us, we work with them for you.  Financial obligations will be met, amicably and professionally.  We may not be able to change the industry’s tarnished reputation, however, we will not join in it either.  Trust us with your accounts receivable management, you will be thrilled with the results.

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