Looking for a list of Debt Collection Dos and Don'ts for your own debt collection?
Are you a creditor or debt collector that has found themselves unsuccessful with their debt collection process lately?
If so, you are probably very stressed about this as most of your income and earnings likely originate from debt collection.
Debt collection can be difficult at times. There are a lot of factors that have to be considered and met for you to be successful.
Sometimes it can be difficult to identify the cause of your struggles with debt collection, due to the number of variables, which can make resolving it a lot more difficult!
Sometimes, it is simply a matter of a simple error in your process or a little thing that you could add for it to work better for you.
This is why it can be helpful to have a simple guide of what to do and what not to do, so you can make sure that you are doing the right things.
In this article our Australian debt collectors will discuss some simple dos and don’ts of debt collection so that your process can be more effective for you and your clients!
Debt Collection Dos
In relation to debt collection dos and don'ts, there are a number of things that you must do.
Dos and Don'ts - 1 - Learn the Laws
The first thing that you should be doing when collecting debts is learning the laws.
Debt collection is a process that involves a lot of trust and handling of money.
For this reason, there are several guidelines in place to protect the safety and well-being of debtors and to guide debtors into doing this too.
You must know these guidelines so that you can follow them.
Dos and Don'ts - 2 - Document in Detail
Another important thing that you should be doing when collecting debts is documenting in detail.
Documentation is important in ensuring that you have all the necessary information and, if necessary, evidence about your client and the debt.
Make sure you are recording conversations (where allowable) and creating and organising notes and files for clients.
This way, you will always have the necessary information when needed.
Dos and Don'ts - 3 - Communicate Effectively
Another important thing that you should be doing when collecting debts is communicating effectively.
Communication is key to a successful debt collection process. Without it, clients may have issues that you are unaware of, and the needs of both parties will not be met and acknowledged.
Reach out to your clients when necessary and check in if they are not making payments.
This way, they will know that they can reach out and explain their issues when necessary.
Dos and Don'ts - 4 - Validate Debts
Another important thing that you should be doing when collecting debts is validating debts.
If a debtor asks for validation of a debt, always provide them with it!
They may need details of outstanding amounts, information about you and your business, or whatever else may be necessary to make payments.
This will make the process a whole lot more smooth sailing and will also upkeep the debtors right to validation of their debts.
Dos and Don'ts - 5 - Be Flexible
Another important thing that you should be doing when collecting debts is being flexible.
Flexibility is important in debt collection. When someone agrees to take out debt and make payments, they will be in a certain position.
This position will potentially change with time, which may mean that your debtor will need you to be able to negotiate so they can continue to make payments.
As irritating as this may be for you, it may be the difference between them declaring bankruptcy and insolvency.
Dos and Don'ts - 6 - Preserve Privacy
Another important thing that you should be doing when collecting debts is preserving privacy.
As a creditor, you will have access to a lot of confidential information that could be potentially damaging to them if others get access to it.
You should, therefore, be extremely careful with preserving the privacy of your debtors, so this information does not get into anyone else’s hands!
Releasing information about your client or their debt violates their rights and debt collection guidelines.
Debt Collection Don’ts
In relation to debt collection dos and don'ts, there are a number of things that you must not do.
Dos and Don'ts - 7 - Engage in Harassment or Abuse
The first thing that you should not be doing when collecting your debts is harassment or abuse.
Harassment and abuse are very serious offences that should be avoided at all costs!
When it comes to debt collection, you must be following communication guidelines so that your actions do not constitute harassment.
Furthermore, engaging in threatening or violent behaviours that may be abusive in nature.
Dos and Don'ts - 8 - Misrepresentation
Another damaging thing that you should not be doing when collecting your debts is misrepresenting yourself or the debt.
You should never misrepresent yourself, the nature of the debt, or the actions that you intend to take when talking with a debtor.
Not only will this lead to confusion and poor communication, but it may be considered to be an offence!
Make sure that you are always clear with debtors regarding your identity and what you want from them so that no misrepresentation will occur.
Dos and Don'ts - 9 - Discuss Debts with Others
Another damaging thing that you should not be doing when collecting your debts is discussing the debt with others.
Discussing a debt with anyone other than the debtor is a violation of their privacy rights and can lead to conflict and shaming.
When contacting a debtor, you should only use their name if asking for them on a phone at a workplace or home, being careful not to reveal any information about the debt or what you are calling for in most circumstances.
Dos and Don'ts - 10 - Ignore Complaints or Issues
Another damaging thing that you should not be doing when collecting your debts is ignoring complaints or issues with clients.
Every business owner has to deal with complaints. No matter what you do, someone will be unhappy with something.
It is important that you take complaints and issues seriously and follow up with them!
Dos and Don'ts - 11 - Threaten Illegal Actions
Another damaging thing that you should not be doing when collecting your debts is threatening illegal actions.
Threatening to physically abuse your client, leak information about them, or do anything else that is illegal is serious and can result in legal action and other serious consequences!
Dos and Don'ts - 12 - Violate Communication Guidelines
Another damaging thing that you should not be doing when collecting your debts is violating communication guidelines.
As discussed before, there are guidelines surrounding how often you are permitted to contact your debtor, which must be followed, or you may be considered to be harassing them!
Hire a Debt Collector
Have you done everything to resolve your issues with your debt collection process but are still struggling to collect debts?
If so, it may be time to hire a debt collector to help you out! A debt collector is a professional in the industry and can help you to successfully collect those debts once and for all!
Consider debt collection and submit your debt online today.
Advance debt collection is an Australia-wide commercial debt collection agency and credit and accounts receivable management. We can recovery your debts, conduct skip tracing, and manage your accounts receivable. We collect your debts for commission only. This means no collection, no commission. We are professional debt collectors with combined 20 years of experience to help you collect your debts. We are partnered with expert litigation lawyers with years of experience in debt recovery, enforcement, and insolvency. Under the Agents Financial Administration Act 2014 Advance Debt Collection Pty Ltd hold authority number 4583821 to act as a debt collector. ADC Advance Debt Collection® is a registered trademark.