5 Myths about Debt Collection
Over time, a few bad eggs have given the debt collection industry a questionable reputation with the public as well as people who have failed to pay their debts on time. With this in mind, we have set out to clear up the most common myths surrounding debt collection.
Debt collectors will damage my relationships with customers
It’s natural to have concerns about handing a customer account over to an external party – in fact, it’s a sign of a good relationship manager.
With that in mind, debt collectors are increasingly conscious about creating a positive experience for creditors and debtors alike. Our focus is on getting you paid while maintaining that relationship, not destroying your business.
I’ve personally experienced many cases where debt collection was able to raise an issue with provided goods or services which otherwise may have gone unnoticed. In these instances, an experienced debt collector will be able to mediate these issues, giving you the chance to address them, and creating a positive outcome for both parties.
Experienced debt collectors are also able to identify and empathise with debtors in financial distress. The establishment of payment plans, or scheduling of future payment is an excellent way to accommodate such a debtor whilst still helping to solicit payment for an outstanding debt.
Debt collection has to be expensive
Debt collection has a reputation for being unfeasible for many business people who simply can’t afford to take a significant loss on their outstanding invoices.
While this perception is often confirmed with many debt collection agencies, there are some cost-effective solutions that can produce effective results at an affordable price.
Our team, for example, is entirely Australia-based, is hugely experienced in dealing with debts from a wide range of industries, and is able to offer their services for collection fees of just 10% of the repaid amount of the debt.
Whatever your requirements or circumstances, we believe that there is always a cost-effective solution when it comes to debt collection.
Debt collection is risky
With many debt collection carriers charging up-front fees, debt collection is often viewed as a risky proposition for businesses looking to recover outstanding payment.
The rise of subscription-based debt collectors who harness overseas call centres has allowed many businesses to recover debts in smaller amounts; unfortunately, these agencies also charge large up-front costs before service can begin.
We’ve always taken pride in our no-collection, no fee service model, which we feel presents the lowest risk to customers looking for an effective debt collection agency. With no up-front fees, there’s little risk in engaging a provider with such a business model.
Debt collection should only be used occasionally
If you’re involved in business, there’s a fair chance that you’ve spent considerable time and effort attempting to recover unpaid invoices for your business at some point.
With that in mind, debt collection should be a no-brainer for many business people.
As a business person, there is no resource more valuable than your time, which should be invested developing your business or generating income. Engaging an experienced, professional debt collection company with reasonable fees is a hugely effective way of improving your bottom line through better distribution of your time.
Debt collectors don’t care if they recover my debt
I’m not going to pretend this isn’t always true. The operating models of some debt collection platforms simply offers no incentive for debt collection case workers to perform on your behalf.
However, a few debt collectors (including Ezi Debt Collection) operate on a no-win, no fee basis – if we can’t collect on your behalf, we don’t generate income. This operating model incentivises collection since it forms the basis of company income.
If engaging a dedicated and invested debt collector is a must-have for your business, we would recommend using an agency which operates in this manner.