Using a debt collection agency is a great way to recover late payments and other debts that you are owed. There are however many myths about the process and practices of using debt collection services.
In this article we debunk 10 of the most common myths you will hear about using a debt collection agency.

Myth 1: Only big businesses can use debt collection agencies

Anyone can use a debt collection service. Late payments are prevalent in businesses of all sizes, and some smaller businesses may lack the time or manpower to ensure credit control and late payment is up to date. Using a debt collection service may get them better results, and is less time consuming, meaning they can concentrate on their business.

Myth 2: It is an expensive process

Many debt collection services work on a no collection-no fee basis. This means there are no upfront costs, hidden fees or subscriptions to pay. It may also be possible for the agency to recover costs and interest, direct from the debtor, in addition to the original debt. When thinking about instructing someone for debt collection services, you must always remember that the price of hiring them will be a lot less than writing the debt off.

Myth 3: Debt collectors take goods away

Most people get confused between a debt collector and a bailiff. A bailiff will have the authority to take goods and property away in the form of warrant issued by the courts. A debt collector will get in contact with the debtor, most likely by phone, email or post to regain unpaid sums.

Myth 4: It will damage my brand and business

To keep your reputation intact, do extensive research to find a debt collection agency that aligns to your core brand values. In order to keep this process running smoothly it is worth considering introducing a debt collection agency as part of your credit control process. This will ensure the agency matches your styling, whilst also adding their own expertise to ensure payment is received faster.

Myth 5: Legal action is more effective

Although going down the legal route with solicitors and lawyers is an effective method of debt collection, it can be much more expensive and time consuming compared to using a debt collection agency. A debt collector will work with your customer to recover funds, which can help keep your relationship and brand intact before going down the legal route.

Myth 6: You can only recover old debts

You can recover debts at any time or age. In fact, debts that are referred earlier are the more likely to be collected. It is sometimes more important to use a debt collection business sooner, rather than later. It is also worth considering setting up an ongoing contract with an agency to help recover debts once they reach a certain age.

Myth 7: Debt can only be recovered if it’s in a contract

Although it is ideal and much easier to recover debt that is in writing or in the form of a contract, sometimes it isn’t required to recover debt. Success will depend on evidence, so the more the better. Sometimes, even text messages and emails and be used to prove the amount you are claiming.

Myth 8: You will have to go to court

Although some complicated cases go to court, legal action is always deemed as a last resort for debt recovery. The goal of a debt recovery agent is to get things settled as quickly and easily as possible, and to act in everyone’s best interest.

Myth 9: Debt collectors can be aggressive

Unfortunately, films and television can portray debt collection in a negative light, with fictitious characters using criminals to recover debt by any means possible – even by threats and violence. This is not the case in the real world, with a more professional and respectable route taken by agencies. All work is fully regulated, with legalisation about how debtors and claimers can be contacted.

Myth 10: Overseas debt isn’t possible to claim

Although recovering debt from abroad clients isn’t as easy due to jurisdiction and distance, it is still possible. Partnerships can be formed with organisations from other countries to help recover debt that is overseas.
So, there it is – the K2 Collections debunking of the top 10 debt collection myths. If you are still unsure about the debt collection process please get in-touch and we will be able to help you with your enquiry.

 

K2 Collections are a UK based Debt Collection Agency with offices in London & Birmingham. If you would like any further information please get in touch.