Your company has a number of outstanding payments from customers. You are ready to take the cases in your own hands and convince these customers to pay what they owe you.
Before picking up the phone, you need to know that debt collection is a delicate process. If you don’t know what you’re doing, you can stumble into a serious mistake – or more of them.
Common mistakes do in DIY -Debt Collection
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1. Violation of the Fair Debt Collection Act (FDCPA)
If you are not careful with your debt collection effort, you can accidentally offend the law of fair collection practice (FDCPA). FDCPA is a federal law that sets clear guidelines on how companies can interact with debtors. Violation of this law may land your business with a fine or trial.
Violation of FDCPA is an overly common problem. The Consumer’s Financial Protection Bureau’s Annual Report At the FDCPA stated that the agency received approx. 109,900 complaints from debt collection from consumers in 2023 alone. The complaints covered offenses such as trying to collect debt that is not caused by threatening negative action or makes frequent calls.
When you are not well known with all the rules of FDCPA, it is easy to accidentally break these rules.
2. Not to retain documents
Paperwork is very important when it comes to debt collection. When you do not have proof of payment requests and customer communication, your business is more vulnerable to debt disputes. You need to have a clear paper track.
3. Using aggressive communication
Not getting paid can be very frustrating, but you still have to be calm and professional when you reach out to customers who have not yet covered their payments.
You do not want to make the mistake of using aggressive communication tactics, such as making frequent calls, leaving angry voicemails or contacting the customer’s employer to push to a customer to settle their debt. There are two major reasons why this is a mistake. First, it is a violation of FDCPA. Secondly, it is not effective.
Being too aggressive with collection will make customers less likely to resolve their debt. They may not respond to your communication attempts and they can continue to avoid payment.
How professional debt collection companies can help
Avoid these common error collection errors by approaching an experienced debt collection agency for help. Instead of trying the DIY approach, let the professionals tackle the job for you.
Compliance with the rules of collection
You may not be aware of the rules of FDCPA, but a debt collection agency will know them and follow them for a tee. So any collection efforts that an agency handles for your business will be legally compatible, which means you can avoid consequences such as litigation and fines.
Effective recovery methods
Another great reason why you should go to Expert Debt Recovery Solutions Is it agents know how to get results. Agents will know how to contact debtors, communicate the problem and settle the debt without damaging your company’s stars’ reputation.
Access to Spring-tracking
One of your customers seems to have disappeared in thin air after missing a payment. Everything is not lost. A debt collection agency with a jump-tracking department can help you find this “missing” customer and contact them for debt collection.
Prevention of future debt problems
Some debt collection agencies offer services before collection. Your business can use these services to encourage customers to make payments on time and avoid criminal action. Some services before collection include sending reminders to Bill Deficiency Dates and arranging payment plans for customers who cannot cover a large lump sum.
Committing a debt collection is not worth the risk. Hire a debt collection agency to do the delicate work for you. Getting professional help is never a mistake.