With over 60 years of combined experience in debt collection, we have developed and continually improved our debt collection process to get the best collection results while remaining ethical. Therefore, our Goldberg & Oriel professionals offer insights on acquiring successful debt collection strategies for maximum debt recovery.
Effective Communication Strategies With Debtors
Effective communication with debtors is one of the most essential tools for successful debt collection efforts. It takes a combination of empathy, professionalism, and clear communication to create a positive rapport/ trust and encourage cooperation. Below are some strategies that will help establish good communication with debtors.
Choose The Best Medium. With so many communication channels, selecting one that you and the debtor can easily access and will have access to 24/7 is vital. You should also consider the nature and amount of the debt. That ensures you and the debtor pass and receive critical information on time, minimizing misunderstandings. Communication medium options include emails, letters, calls, and in-person conversations.
Provide Contact Information. Regardless of your chosen communication medium, ensure you provide accurate contact information, especially when you update it. That includes your email address, physical address, or phone number.
Be Transparent. Regardless of the information you share with debtors, you should always be transparent to maintain a good relationship and foster cooperation. Therefore, communicate accurate information about the nature of the debt, balances, charges, interest rates, payment due dates, and your bank details.
Use Personalized Communication. When dealing with multiple debtors, tailor every message to match every debtor’s circumstances. That goes beyond generic reminders, which helps the message resonate better with the debtors, increasing effectiveness.
Have a Follow-Up Schedule. A structured follow-up schedule helps foster consistent communication and ensures you send timely payment reminders. It also helps boost accountability on the debtor’s side and shows the seriousness of your debt collection initiative. You can review and adjust your schedule depending on the debtor’s responses to ensure it remains effective and adaptive. You can also intensify your follow-ups from gentle reminders to firmer communications as deadlines approach. To ensure you never miss a follow-up, it is essential to have automated notifications or reminders.
Be Polite And Respectful. While some debtors could be frustrating, it is essential to exercise patience and be polite and respectful. Avoid offensive, negative, or threatening language, as that could escalate a bad situation, damage your and the debtor’s relationship, or land you in legal trouble.
Practice Active Listening And Empathy. Non-payments can be frustrating, but it is vital to remember that debtors are human too. Therefore, you should exercise empathy and listen to their reasons for non-payment. Understanding their side can help you mutually agree on a more flexible and manageable payment strategy.
Document Everything. Regardless of your communication channels and frequency, ensure you have a copy of everything you discuss with debtors. You can record in-person conversations or phone calls, take notes, or save messages and emails to separate folders. Ensure that every document or recording has a date and time stamp. Maintaining these records helps you accurately trace the debt collection process and avoid misunderstandings later.
Escalate Communication For Overdue Accounts. Escalating communication for overdue accounts helps balance consideration and persistence. Begin with friendly reminders, progress to more assertive language, introduce formal notices, and then employ legal warnings.
Debt Collection Negotiation Techniques
Debt collection negotiations ensure you and debtors find mutually acceptable solutions for more effective collection. Below are some strategies to give you an upper hand and increase collection success.
Offer Flexible Payment Plans. Flexible repayment plans show your empathy towards debtors’ financial situation, which could prompt them to be more cooperative. You can offer extended timelines, lower interest rates, and grace periods.
Provide Incentives. Introducing incentives compels debtors to repay their debt before the incentive period ends. Incentives can be in different forms, like early repayment discounts, exclusive perks, extended payment terms, and a reward program.
Educate Debtors. Educating debtors about non-repayment consequences and the benefits of early repayment can motivate them to make payments. Some consequences you can highlight include damage to their credit score and legal action. On the other hand, the benefits of timely repayments include higher credit scores and not dealing with the stress of receiving repayment reminders.
Foster Open Dialogue. Encouraging open dialogue between you and debtors helps foster an environment for both parties to express their perspectives clearly. You can communicate your incentives or consequences, and the debtor can communicate their financial situations and when they can make payments. Using professional and respectful language during negotiations is essential to maintain a good relationship.
Legal Actions And Remedies In Massachusetts
Massachusetts law prohibits deceptive, unfair, and unreasonable debt-collection practices. Therefore, the Attorney general has provided regulations governing the process that apply to original creditors and their attorneys, buyers of delinquent debt, and third-party debt collection law firms or agencies.
Below are the things these regulations prohibit debt collectors from doing.
- Call debtors more than twice at their homes for every debt in seven days or at other places like job locations in 30 days.
- Visit debtors’ homes over twice in 30 days.
- Call debtors at work if they have a request to cease contact. Oral contacts are valid for ten days, while written requests are in effect until debtors revoke them.
- Call outside regular waking hours. If debtors have not communicated their waking time, collectors can only contact them between 8:00 am and 9:00 pm.
- Contact debtors directly if they have attorney representation.
- Call without identifying themselves.
- Provide incorrect, misleading, or deceptive information about the debt, like the amount owed and due date.
- Use threatening, harassing, or profane language.
- Give false threats like legal action and imprisonment if they do not mean to take those actions.
- Charge debtors for express mail charges, long-distance calls, or wire fees.
- Tell people about the debt without the debtor’s written consent.
Balancing Assertiveness With Ethical Debt Collection
At Goldberg & Oriel, we apply an assertive approach in debt collection to relay our seriousness to debtors. However, it is essential to maintain ethical practices. Ethical debt collection involves collecting debts respectfully, fairly, and legally, considering the debtor’s well-being and rights. Below are some tactics that can help you maintain that balance.
- Understanding and following legal guidelines
- Practicing transparent communication
- Offering clear information
- Using professional language
- Employing sympathy and understanding
- Being an active listener
- Avoiding threats and harassment
- Protecting debtor’s privacy
- Being open to alternative payment options
- Educating and empowering debtors
Get More Debt Collection Advice
At Goldberg & Oriel, we invest in a team of well-trained and extensively experienced professionals who understand the ins and outs of debt collection. In addition to offering effective debt collection services, we educate clients on how to successfully collect debts before hiring professional help. Send a message via our online form and work with a reliable debt collection attorney.