Six Debt Collection Myths DebunkedSeparating Collection Agency |
Myth #2: My customers can be arrested if they don’t pay the collection agency.
Fact: Debtors’ prisons have long been a thing of the past. No one is going to arrest your customers if they don’t pay back their debts.
What's more, it is illegal for a debt collector to threaten a consumer with criminal charges or jail time. No reputable agency would ever resort to those tactics. (Failure to pay child support or back taxes, or failure to appear for a debtor’s examination, can result in jail time. However, such situations do not pertain to the vast majority of consumer debts.) So, no -- your customer will not be arrested if he fails to repay the debt. Myth #3: Debt collectors will knock on my customer’s door.Fact: The media likes to perpetuate the image of a debt collector knocking on doors to collect. But in reality, this almost never happens. Think about it. Why would any reputable collector resort to such time-consuming measures? It’s neither efficient nor effective, when modern technology allows agents to make hundreds of contacts a day.
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So if you’re worried that a collector will be paying a visit to your customer’s home, forget it. Not gonna happen.
Myth #4: Collection agencies force consumers into bankruptcy.
Fact: Whenever a consumer files for bankruptcy, almost all of his unsecured debt is wiped clean. Which means that both the original creditor and the collection agency will receive little or nothing.
As a result, it would not make sense for a debt collector to encourage your customer to file for bankruptcy. Rather, they understand that people in collections often need guidance in settling their accounts. This is why they offer the flexibility of various payment arrangements.
As a result, it would not make sense for a debt collector to encourage your customer to file for bankruptcy. Rather, they understand that people in collections often need guidance in settling their accounts. This is why they offer the flexibility of various payment arrangements.
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And while it is true that a collector's job is to collect, doing so often includes financial counseling. The ultimate objective is to resolve the account, not ruin someone’s life or force him into bankruptcy. Instead, they’ll recommend payment plans and other programs to help alleviate financial stress on the consumer.
Myth #5: If I retain a collection agency, I’ll lose customers.
Fact: Professional debt collectors are trained to resolve your client’s problems, not contribute to them. They know that consumers are not happy to learn that their account has been forwarded to a collection agency. They’ll work with your customers in an amicable, diplomatic manner.
They’re also trained to ensure your company’s reputation is not tarnished in any way. So utilizing a reputable agency should never cost you customers.
They’re also trained to ensure your company’s reputation is not tarnished in any way. So utilizing a reputable agency should never cost you customers.
Myth #6: Collection agencies are expensive.
Fact: Most debt collectors operate on a contingency basis. You only pay if they collect. And while they will keep a percentage of the amount recovered, paying an agency is far less expensive than not getting paid at all.
In addition, the best collectors – such as the professionals at CSC – strive to provide measurable value to their clients by lowering their total accounts receivable.
If you’d like to learn more about how CSC can maximize debt recovery for your business – without jeopardizing your valuable consumer or patient relationships – contact us today.
In addition, the best collectors – such as the professionals at CSC – strive to provide measurable value to their clients by lowering their total accounts receivable.
If you’d like to learn more about how CSC can maximize debt recovery for your business – without jeopardizing your valuable consumer or patient relationships – contact us today.
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Credit Service Company, Inc.
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2150 Lelaray St.
Colorado Springs, CO 80909 P.O. Box 1120
Colorado Springs, CO 80901 |
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