With Americans owing billions and billions of dollars in debt, both creditors and collection agencies are feeling the pressure. Debt collectors must employ techniques that will encourage debtors to pay. Successful debt collection techniques will help the collector get the account settled immediately. On top of the pressure to collect debt, debt collectors still have to be mindful of the laws that protect debtors.
So, what are the debt collection techniques that can be used by creditors?
The Call
To collect debt successfully, the debt collector must make sure that he establishes a good cooperative relationship with the debtor. You want the debtor to feel that you’re trying to help and that you’re not out to get him. This rapport can be established by making calls to the debtor. With the right debt collection techniques, you will know how to make the perfect debt collection call.
First of all, open the call by introducing yourself. Formally state your name, the company you work for, and the intention for the call. From the beginning, you want to establish a certain form of authority and credibility. You don’t want to scare the debtor. Instead, you want the debtor to know that you represent the creditor, and you are going to handle this account from now on. The last thing you want is for the debtor to doubt you and start thinking that you may be trying to scam him.
Secondly, immediately ask the debtor about what he plans to do with the debt. Make the debtor explain his situation. Don’t preempt the conversation by asking when he wants to pay. If you do this, the debtor may just give a random dateline which he never really plans to meet. If the debtor refuses to commit to a date or meet your deadline, do not push him. Instead, move on to another topic. Ask about his employment status. Ask about what other loans and credit cards he has.
Thirdly, present options to the debtor. Good debt collection techniques make the debtor feel like he has options, and he has the power to choose how he wants to pay off the debt. If you make the debtor feel like he’s trapped in a corner, he may panic. Establish a calm atmosphere. Make suggestions. Tell the debtor that he can pay using another loan or he can put it in his credit card. A good technique is to give specific options. Since you have asked for his financial background, use the information to present ways for him to settle the account. Now that you’ve presented some options, you can demand for payment in a respectful way.
Lastly, close the call with a confirmation. Whether he agrees to pay or not, ask an open-ended question that will let him explain that he is fully aware of the situation and that he stands by the decision he made.
