3 Secrets of Collections That Everyone Misses
At some point in your business, you’re going to have past due accounts that you try to collect on your own. That’s not necessarily a bad decision provided that you have the time, knowledge, and resources to do it. Here at Clients ARM, we have more than 30 years of director-level experience. We understand that while the collections process is about recovering funds that are owed to you, it’s also a matter of dealing with actual human beings. If you plan on tackling your own collections here are 3 secrets that you need to know.
Secret #1 – Past Due Clients Are Protected by the Law
This is arguably the most important secret that you may not know. People who owe money are protected by federal and likely local law. The Fair Debt Collection Practices Act protects debtors from harassment and abuse. If you violate this law, your business could face a lawsuit.
You should read the Fair Debt Collection Practices Act for yourself to understand your obligations as someone who is collecting on a debt. This post is for educational purposes only and is not meant to act as legal advice. Some of the important points to remember include:
- Debt verification. If the debtor asks for verification of the debt, you must provide it.
- No phone calls at unreasonable hours. Do not call debtors after 9:00 PM and do not call them at an unreasonable morning hour.
- Respect their wishes. If the debtor tells you to stop calling and only contact them by mail, you must abide by their wishes. If they ask you to not call them at work, then you must stop calling their work.
- Do not make false statements or threats. You cannot claim you are a government representative or misrepresent the amount that they owe. You also cannot tell debtors that you will have them arrested.
Secret #2 – Use a Phone Script
Preparing in advance to make collection calls and using a phone script is one of the best things that you can do. Being prepared includes reviewing the account. This will help you answer any questions that a debtor may have about their past due account. Using a phone script will help you sound more professional. Check out Client ARM’s phone script samples that are free for you to use.
Secret #3 – Follow-up on the Phone
One thing that you’ll hear a lot from people who owe you money is that they know they owe you and that they don’t get paid until a certain date. Verify that with them by saying something like, “I see. So, your next payday is a week from this Friday?” They’ll say yes. You can discuss how much they may be able to pay at that time. Then, let them know that you’ll follow-up with them on that date. The key here is to actually call them when you said that you would. Do not rely on the debtor to call you back. You should call them back on that date and let them know that you’re able to take a payment over the phone.
Follow-up is key to putting past due accounts to rest.
Learn More about Collections
If you have questions about collections, let us know! We’d be happy to answer your questions. Clients ARM provides first and third party debt collection. Our collections rate is higher than 90%. We owe this success to treating others how we would want to be treated. If you’d like to schedule a free review of your collections process, we’d love to speak with you. There’s absolutely no obligation.
