Collectors like to talk. It’s what they do all day. They will threaten, cajole and do everything in the book to traumatize your receptionist and wear you down. They pile on stress when you’re already in shock. And it works, which is why so many of them are outrageously rude and offensive.
Business people have no Fair Debt Collection Practices Act to protect them, as do consumers. It can feel like the Wild West. Literally so, as a local business owner discovered, when a rogue collector showed up at his door with a gun on each hip.
Collectors can appoint themselves with legalistic titles. Some call themselves “officers.” And company names can be fabricated to make them sound like law firms. When you’ve picked up the phone to hear someone say, “This is Mr. Screw, the pre-legal officer at Cheatem and Shyster,” you’ll know what I’m talking about.
Obviously, there is good and bad in everything and in every business and profession. It’s characterized by the bell-shaped curve. At the one extreme of the collection business there are really talented people. They listen carefully to your side of the story and are adept at getting what they want by doing so.
At the other end there are those who just seem to go through life having bad days. It’s probably these people who give the industry a bad name. And it’s why there are more complaints filed with state and federal agencies about the collection business than any other category. I wonder why this is?
It’s not hard to fathom. Just this week, the nation’s biggest collection firm had to pay $250,000 to the state of Texas. Why? Some of it was because collectors, amongst other things, were making “harassing and sometimes profanity-laden calls to Texans.” Refusing to verify debts, when challenged, was also part of the story.
How do you deal with these people? First thing first. Don’t mention it, but collectors have no power. Pull back the curtain and you’ll find the Wizard of Oz. It’s all smoke and mirrors. Collection firms typically get paid up to fifty percent of what they squeeze out of your company, depending on the age of the account. And they are assigned these accounts for a set period, after which they typically lose them if they are unable to collect. If the account is then forwarded to a law firm, the collection company receives a small percentage of anything the attorney is able to rake in.
The big threat that collectors make is, “We’ll sent it to our attorney for legal action.” Actually, this is the last thing they want to see happen, if in fact they believe they can squeeze cash out of your starving business. Or they may also threaten to force your firm into bankruptcy. Excuse me? A desk collector? At what astronomical cost, with whose money and to what end?
Your best weapons are knowledge and attitude. Give collectors a good reputation to live up to. And if you are up against a rude and obnoxious individual, let them rant. Stay cool and calm. Don’t wrestle with a pig. You both get dirty and the pig loves it.
Work out a settlement deal with them. This has to be agreed in writing and signed by both parties, before you transfer any of your precious business life blood to them. Take your time and keep to your schedule, not theirs. The situation is not usually as urgent as they make it out to be. And it’s always urgent for them, especially if they’ve had a bad month and their car payment is due.
Don’t fall into the, “We just want a good-faith payment,” trap. If you’re cash strapped, you can’t likely afford anything, whether or not someone wants to call it “good faith.” Never send money in the absence of a written agreement. Oh, and never, ever pay by phone. You could lose a lot more than expected.
Remember, your company’s operating cash needs may require you to withhold payment to others for the time being. Your business needs to survive to enable you to start settling past-due accounts as cash becomes available.
Tough times call for tough choices. Your company’s survival is your first priority. Brutal necessity determines that collectors get nothing from it until you decide to give it to them. And this should be on your terms. Remember, you have control over what they want, which is their commission. When times are tough, don’t dance to their tune.