Here is a scenario: one of your collection agency clients needs you to collect an overdue debt, but wants you to get the money without ruining the relationship with the customer who owes it to them. It is a delicate situation, but it can be done. With the right actions and attitudes, a collection agency can preserve the relationship while collecting the delinquent funds.
The key to productive collections that cause few problems is to be professional. Do not just collect the debt, help solve problems. The debtor is facing a payment problem, so rather than adding to the problem by harassing them, find ways to work with them to create the best payment plan for both of you.
Prepare for the Interaction
Have all documents on hand both for your reference and to send to the debtor if necessary. Recent rulings by the Consumer Financial Protection Bureau (CFPB) require this, so have them on hand in order to facilitate discussions.
What you hear and what you deduce from that, is at least as important as what you say. Ask questions and think about the answers. They will help you achieve resolution because you will be able to find the right means of doing so. Your goal is to collect the payment in full while maintaining a strong customer relationship, not to out-talk the other person.
Defy the “Collector” Stereotype
Try applying the Golden Rule: Treat others as you would like others to treat you. In collections, this is important for two reasons:
- Many debtors owe multiple creditors. Kindness and respect makes them more likely to put your debt at the top of the pile.
- Talking down to debtors or harassing them can make them defensive. From then on, anything said that is slightly aggressive will be perceived as a threat or harassment. The problem with this is that the debtor can look up the collection agency laws online and file complaints with the CFPB. Enough complaints will cause an audit of your company. Better to be polite to a debtor than to face the CFPB.
Provide Options for Repayment
One of the best ways to collect debts is to provide a multitude of options for collecting them. Offer a multitude of methods for repayment. Offering payment by credit card, debit card, or Automated Clearing House (ACH) transfers relieves the debtor of pressure. When they know they can change up their bill-paying method from payment to payment, they will be more likely to pay you back on time.
It all really boils down to this: Whatever the situation, treat the person who owes money with respect. Handle the situation without judgment and suggest solutions to problems. You will collect more money in a more timely manner.