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How Customer-Centric Debt Collection Can Benefit Your Business

If your business is owed money, you know that debt collection can be a daunting task. It’s important to remember, though, that debt collection doesn’t have to be a negative experience for your customers. 

In fact, there are many advantages to adopting a customer-centric debt collection approach. In this blog post, we will discuss the benefits of customer-centric debt collection and how it can benefit your business!

1. Send gentle reminders

One of the most effective ways to get paid by your debtors is to send them gentle reminders. Reminders can be in the form of emails, text messages, or even phone calls. The key is to make the reminder polite yet to the point.

An email might say, “We noticed you haven’t made a payment on your outstanding balance of $634. Please send us payment as soon as possible, so we can keep your account in good standing.”

A text message might say, “Reminder: you owe $634. Please pay by 09/01/2022 to keep your account current. Need assistance? Contact us any time by phone, email, or text.” And a phone call might say, “This is a friendly reminder that you have an outstanding balance of $634. We would appreciate your attention to this matter. Please let us know if there is anything we can do to assist.” You’re more likely to get paid quickly with the “more flies with honey” approach.

2. Let them know their account is at risk of collections

It might seem counterintuitive, but letting a customer know that their account is in danger of being sent to collections can actually be a customer-centric approach to debt collection. Here’s why.

Customers who are unaware of the status of their account are more likely to miss payments, accrue additional fees, and damage their credit score. On the other hand, customers who are aware that their account is in danger of being sent to collections are more likely to take action to avoid it.

They might make a payment, initiate negotiations for a repayment plan, or arrange for a lump sum payment to bring things current. Also, they will be more likely to remember your company positively if you handle the situation in a professional and courteous manner. So while it might not seem like it at first, letting a customer know before it gets to the collection point can actually be good for business.

Of course, the tone is everything. You don’t want to do it in a threatening manner, nor use language that might violate the Fair Debt Collection Practices Act (FDCPA). That’s why many businesses opt for a debt recovery specialist.

3. Keep communication open

Be reachable. Don’t initiate any contacts outside of what is acceptable in FDCPA, but do make time for customers who might have difficulties contacting you during normal office hours. This doesn’t have to take a huge chunk out of your day either.

Following up on a Facebook message, texting them back if they’ve initiated, or agreeing to talk or meet with them at their convenience. These are all ways to be customer-friendly while protecting your best interests.

4. Offer payment plans

If you’re not already offering payment plans, you should. For example, let’s say a customer owes you $100. You could offer them a payment plan of $20 per week for five weeks.

This is an excellent way to recoup your debt while also being considerate of your customer’s financial situation. It’s also important to note that, according to the FDCPA, debtors have the right to request a payment plan. So, if you’re not offering one proactively, you could be missing out on an opportunity to collect what’s owed to you.

5. Don’t harass them

Debt collectors cannot engage in any conduct that harasses, oppresses, or abuses any person. This includes using obscene language, making threats of violence or harm, and repeatedly contacting a person who has asked not to be contacted.

Don’t do it if you want to get paid and don’t want to be sued.

Adopting a customer-centric debt collection approach can benefit your business in many ways. By sending gentle reminders, keeping communication open, and offering payment plans, you can improve your chances of collecting on the debt while maintaining a good relationship with your customer.
Most importantly, by being understanding and avoiding harassment, you will create goodwill and protect your own best interests should you have to take legal action later on in the process. Of course, that can be easier said than done, and that’s where Southwest Recovery Services is here to help. We have many years of experience working within the restrictions of FDCPA. We know how to approach debtors to get our clients paid quickly, and we’re ready to help. Contact us today!

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