If you’ve ever held a sales position, you probably know a thing or two about the concept of objections. These are the first excuses that someone will make as to why they cannot buy your product or service.
The same will be true when you are asking a consumer or business to pay off a debt to you; they will tell you any number of excuses to avoid paying the debt. The key to successfully closing those accounts is to be compassionate and flexible, but also not backing down.
These four solutions will help you navigate the murky waters of helping consumers (and businesses) pay off their debts:
Ask if they are clear as to why their debt is in collections.
The first key to debt collections is making sure that it is clear to the billing department or consumer why they are being contacted by a debt collection agency. Review their case briefly and give an explanation of the debt.
Occasionally, the debtor may not be aware of why they are being contacted. However, most likely, they know the terms of the contract and are attempting not to pay for the product or services.
Act as a resource to help debtors find the money to pay their debt.
The key to compassionate debt collection is act as if you’d like to help the debtor find a solution to their problems. Do not overemphasize the negative aspects of their failure to pay.
Instead, ask how you can find the money together:
- Is a second mortgage on a home possible?
- Do they have a line of credit for the business?
- Can they take out an accounts receivable loan?
- Can a consumer obtain a personal bank loan?
- Is there money in a retirement account to borrow?
Be willing to negotiate the terms of repayment of the debt, if possible.
No one likes to feel backed into a corner or treated aggressively. Being part of a debt collection solution means negotiating so that both debtor and collector are able to reach a viable solution.
If you cannot negotiate the amount of the collection:
- Ask if they are employed and can pay a little with each check
- For businesses, ask about invoicing processes and timing of receivables
- See if a small monthly repayment is possible instead of a lump sum
If the amount of the debt is negotiable:
- Focus on “I can only lower this if…” terms
- Be clear that a compromise does not excuse repayment
- Help the debtor to feel like they are getting a deal…even if the reality is you’re pleased to collect at all
Deal with each account human to human: firmly but politely.
Most debt collection agencies maintain an extremely polite demeanor, even when dealing with rude customers. As the final solution, treat each of your accounts as human to human.
Use phrases or comments that diffuse anger and deflect negativity:
- Thank you for telling me that. However, my notes indicate that…
- Maybe you can direct me to the person I should be speaking to?
- Would you explain it another way why you don’t think you owe this debt?
If you sense that someone is going to be unreasonable, don’t take it personally. Remember that they engaged in a contract that makes them liable for the fees you are trying to collect.
Using these solutions as part of your debt collection process will make it easier for you to keep a positive outlook on your goals. However, if you find that you still have questions, Direct Recovery may be able to help. Contact us today for details.