Debt Collections via Telephone

By: Alan & Steiner

One of the most commonly used method of debt collection that credit collection agencies use is the telephone. Aside from face-to-face interaction with the debtor, and early collection demand letters, the telephone is the best way of communicating with a debtor. Through a telephone call, the collection agent can impress on the debtor the gravity of the situation, explain the details of the debt, and get as definite a resolution as possible.

Through the course of a telephone communication, the debt collector can determine why the debtor has not paid his bills. Knowing the reason why the debtor has not been able to meet his obligations is the first step to debt collection and debt resolution.

The most common reason for a debtor's nonpayment is, obviously, the debtor's actual or perceived lack of funds. Through the telephone, the debt collector can determine which of the two it is. Is it actual lack of funds or is it merely perceived lack of funds? The former is more problematic but a payment plan can be arranged. The latter is more easily addressed by pointing out fund sources that the debtor may not have previously realized. The debtor may just be suffering from some short-term cash flow problems because his money may be tied up in non-liquid assets. In such a case, the debtor can give the debtor advice on how to bridge his funds deficit and thus meet his current obligations.

One other reason for a debtor's reluctance to pay can spring from his belief that the amount stipulated is not what he actually owes. He can be disputing some items as fraudulent or unjust. Whatever the case, a telephone call can clear up the issues through detailed discussions. When the debtor's dispute is valid, then the debt can be adjusted to reflect the final agreement and arrangements for payments can commence.

There is one thing though, that a telephone call cannot overcome, and that is a debtor's absolute refusal to pay and even discuss the debt. If this is the case, the telephone call collection efforts will be superseded by more aggressive means of debt collection such as legal action.

Telephone communication is vital to debt collection efforts because of its typically faster resolution outcomes. But a debt collector must abide by fair telephone debt collection practices such as choosing the appropriate time for collection calls so that this debt collection method will bear optimal results.

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