Unfortunately, the perception of debt collection agencies isn’t always positive, due to a few rogue agencies giving us a bad name. This leads to businesses writing off debts as uncollectable, which could have been avoided if they had the help of a debt collection agency. There are many agencies out there, like us, who deliver a professional and successful service.
In this blog, we will be busting some of the most common myths about debt collection so we can put your mind at ease about engaging a debt collection agency!
Most agencies will work on a no collection, no fee basis so you only pay if they are successful in collecting the debt. They usually charge a % of the money recovered which is based on the age and value of the debt. However, the fee you pay will be minimal compared to the amount you would lose if you write off the debt as uncollectable. The fee could potentially be covered by the late payment fees that are added to the debt.
The relationship with my customer will be impacted
Any debt recovery agency worth their salt will understand the importance of maintaining your relationship with your customer. Here at My Debt Recovery, we pride ourselves on our professionalism and how we handle our cases. We actually have a number of clients who were originally debtors that we collected monies from.
Obviously, some of your customers might not like the fact you’ve instructed a debt recovery agency, but you have only taken that action because they haven’t paid. You’ve delivered a product and/or service, therefore, you deserve to be paid. If they are not willing to pay, are they actually a valuable customer?
Debt recovery is only for big companies
Thousands of SMEs outsource their debt collection to agencies. With small teams, business owners understand that chasing late payments has a huge impact of their resources and steers their time away from their business. By leaving it to those with the expertise in debt recovery, they have a much better chance of recovering what is rightfully theirs.
I’d need more than one debt to be able to instruct an agency
False. Us and many other debt recovery agencies work with many businesses who have just one debt to collect. We have a mixture of both single debts and multiple debts, where the business retains us on a regular basis so it doesn’t matter how many you have.
Debt recovery is only for old debts
Actually, the earlier a debt is referred to a debt collection agency, the higher the likelihood of recovery is. Also, agencies have a specific skill set so what could potentially take you months/years, may only take an agency a matter of weeks (obviously, dependent of the situation).
It’s better to use a solicitor
Sometimes the legal avenue is necessary, however, using a solicitor at the beginning of the debt recovery process is often not the most cost effective route. The majority of our cases are resolved through negotiation and never reach the legal stage. So, why would you waste your money on legal costs, when it could be resolved before you even get there?
If your debt did need to enter the litigation stage, My Debt Recovery can also support you through this process, as we are part of an innovative dispute resolution process called Escalate. Escalate allows small to medium businesses to effectively pursue commercial disputes without the upfront costs and financial burden on their business.
Hopefully, now we’ve busted some of those myths, you will feel more comfortable about seeking help from a debt collection company, allowing you to get some of your valuable time back!