Debt collection is a process that businesses use to collect money that is owed to them. There are many different debt collection practices, but some of them are more effective than others. Tell that to any average small business owner with approximately $84,000 in unpaid debts, and watch them nod in agreement.

In this article, we will discuss some of the most common debt collection practices and why they often don’t work. Hopefully, this information will help you avoid some of the pitfalls associated with debt collection.

1. Calling debtors multiple times a day

For starters, doing this will put you out of direct compliance with the Fair Debt Collection Practices Act, as well as state laws. For instance, in Texas, debt collectors are only allowed to call a debtor three times a week.

Furthermore, multiple calls will give your debtor a clear idea of how much you’re willing to harass them in order to get paid. That’s not a good way to start off a business relationship, even if it is a troubled one.

2. Making empty threats

This might seem like an effective way to scare a debtor into paying up, but it will likely backfire. Not only can it be against the law, but it can also make the debtor less likely to trust you or work with you in the future.

If you tell your debtor that you’re going to sue them or take some other legal action if they don’t pay up, you had better be prepared to follow through. And it should come at a point where you’ve followed the law and exhausted every avenue of cooperation and collection practices within the confines of the law. Otherwise, you’re just wasting everyone’s time.

3. Refusing to give basic information about the debt

If a debtor asks for verification of the debt, you must provide it. This is required by the Fair Debt Collection Practices Act. The FDCPA also requires that you give the debtor your name, address, and phone number if they request it.

Keeping good records is a must in any line of work, but it’s especially important in debt collection. You should be able to produce documents that verify the debt and show when it was incurred, who the original creditor is, and how much is owed. If you refuse to do so, good luck collecting. You’re going to need it.

4. Refusing to work with the debtor on a payment plan

If a debtor is having trouble making ends meet and asks for help, the worst thing you can do is refuse to work with them. It’s in your best interest to try and come to some sort of agreement, even if it means accepting less than the full amount owed.

Remember, a debtor who is unable to pay is not going to be able to pay at all if you push them too hard. And if you’re trying to handle collection all on your own, then you’d better have a great deal of trust in your record-keeping ability, knowledge of the law, and resources to follow up.

You can get what you are owed, what you deserve. However, rigid practices and refusing to negotiate are going to increase the odds of the other side delaying and digging in their heels.

5. Contacting family or friends of the debtor

This tactic also runs afoul of the FDCPA, and it brings even more “cooks into the kitchen,” so to speak. By not keeping the matter between you and the debtor, you run an increased risk of tripping up legally and stocking any future litigation with a wealth of witnesses against you.

6. Continuing to contact the debtor after being asked to stop

If you’re having trouble collecting on a debt, it can be tempting to keep contacting the debtor in the hopes that they’ll eventually pay up. However, this is generally not a good idea.

First of all, if the debtor has asked you to stop contacting them, continuing to do so may violate their rights under the FDCPA. Additionally, it’s important to remember that debtors have a number of options for dealing with creditors. If you’re not careful, you could end up making the situation worse.

Instead of continuing to contact the debtor yourself, your best bet is to work with a reputable debt collection agency. Southwest Recovery Services has experience dealing with recalcitrant debtors, and we know what it takes to get paid.

We also have a number of tools at our disposal, including skip tracing and asset verification. As a result, even if the debtor has asked you to stop contact, working with us can increase your chances of getting paid in full and at a much faster pace than taking the matter on yourself.

Are you frustrated with your progress (or the lack thereof) when it comes to getting paid fast? Don’t make it worse for yourself. Let professionals do the heavy lifting. Contact us today to get started with your case.