Success in debt collection isn't just about being proactive and persistent. A good debt collection agency will also have proven communication skills. That means using every available channel to make contact with the debtor, resolve any issues and achieve prompt settlement of the debt. It also means communicating with diplomacy and propriety to ensure that the client's reputation is protected and valuable business relationships are not compromised.
Traditional or digital communications?
A hard copy letter sent by post remains the most authoritative form of communication for debt collection. It’s also the most likely to be read, particularly if it’s sent by some form of registered or signed-for mail service.
However, the more contact points the better. Adding digital channels can help to reinforce the message and just might catch the attention of the debtor at the right moment and in the right location. Unscrupulous debtors can be elusive and a good debt collection agency won’t simply rely on sending a letter to an address that may no longer be valid. Emails and SMS messages should reach the debtor wherever they are.
Of course, there’s no substitute for personal contact, which is why telephone follow-up is mission critical. More than anything, it’s an opportunity to openly discuss the situation with the debtor and to find out if there's a particular problem holding up payment of the debt.
What's the first step?
When making initial contact with a debtor, a debt collection agency will usually inform them that they're working on behalf of a particular client to recover a debt, as well as clearly outlining details of the outstanding debt balance.
In debt collection, communication is always a two-way street. From the moment of first contact, the debtor will always be given the opportunity to respond and state their position. There may be a simple reason why the debt has not been paid. For example, it may simply be an oversight, in which case payment could be forthcoming without the need for further action.
What if the debt is disputed?
If the debtor claims that there's an unresolved contractual issue, they'll be asked to provide evidence in writing. The debt collection agency will then forward this to the client and consult them to establish whether the debtor has any justification for withholding payment.
Hopefully, at this stage the dispute can be resolved and the debt settled. However, if this begins to look unlikely, it may be time to escalate to legal action. This is always a last resort in any debt collection process, so the debtor will usually be given another opportunity to respond and make their position clear before things are taken to the next level.
If the legal route is the only course of action, the debt collection agency will be able to provide reliable advice and guidance to support you through the process. In some cases, the mere threat of taking things further, in the form of a 'letter before action', can be enough to encourage the debtor to pay what’s owed.
Whatever course a debt collection takes, it’s crucial that it is managed with professionalism and integrity at every stage and to the letter of the law. Protecting your reputation and offering the debtor every opportunity to resolve a debt in the correct way are foremost.
Experts in the art of communication
At Redwood Collections, we have decades of experience in debt collection and our highly effective business model is rooted in the principles of good communication. All members of our team are highly trained to operate with integrity and professionalism, ensuring that even the most challenging or sensitive cases are dealt with appropriately. You can rely on us to stay in touch with your debtors and help your business Grow Stronger.
