When it comes to debt collectors and debt collection, there is a lot of misinformation floating around out there.

Because of this misinformation, there are many people and businesses out there who are hesitant to use a debt collection service when they actually need it because they are worried it might impact their business.

Today, we want to bust some of these common myths and misconceptions about debt collection, so you can have a better understanding of what debt collectors actually do and you’ll be able to see how they can help you.

Keep reading to learn more!

The biggest misconceptions about debt collection and the truth

A debt collection service can be a simple way for you to recover outstanding payments from clients and keep your business running smoothly, however, because of some of these misconceptions, many businesses avoid using them.  So, let’s put some of these rumours to bed, and bust some debt collection agency myths!

1. Debt collectors are relentless and will hassle people even when they cannot pay

There is some truth to this myth – debt collectors are relentless but not necessarily in the way that you think. While their goal may be to secure payment from the debtor, they are focused on finding a solution, something that is going to work for their client and the debtor. A common solution in these cases is a repayment plan which is manageable for the debtor.

This misconception often leads to debtors doing what they can to avoid communicating with the debt collector at all, when in reality, they often have the same goal, which as we said earlier, is to resolve the case.

Debt collectors are trained in communication and understanding people’s individual circumstances, they are also taught that hassling a debtor is in almost every case, a very ineffective way to recover debt.

2. Debt collectors will charge you a lot

Working with a professional debt collection service is probably a lot less costly than you realise. While each collection agency will have their own payment structures, in many cases the agency will earn a commission that is a percentage of the money recovered. Often this is a sliding scale that may increase slightly as the size of the debt being recovered increases.

Many collection agencies offer a membership structure option as well, where you can sign up for the service each year, and the commission paid the agency is often lowered. This is a great option for medium to large sized businesses with many different clients.

It’s also very common for a collection agency to offer a no recovery, no fee option – so if they are unable to recover the debt, you don’t pay them!

An important thing you need to consider is the resources you may otherwise be using in your own debt collection recovery efforts – which are often less effective than a professional service. Time is money.

3. Debt collectors only care about the money, not your problems

While the recovery of the debt is a priority, debt collectors are trained to find solutions that is manageable for the debtor. If we can’t find a solution, we don’t get paid. So, while the most ideal scenario involves the debtor paying their outstanding debts in one go, it’s usually not the way it goes.

So, it falls on the debt collector to work with the debtor to understand why they have not or cannot pay. Our aim is to work with you to understand the reasons and find a solution, and to do that we have to understand your problems.

4. Debt collectors are mean bullies using shady tactics

There is certainly a stigma associated with debt collection, and while we can’t deny that there are some shady people out there, they are few and far between when it comes to professional debt collection services.

This service is highly regulated and governed and debt collectors are required to work within consumer protection laws. A professional debt collector, as we mentioned above, has the goal of finding a solution, but they have no interest in doing this the wrong way or by making someone’s life miserable.

It is important for you to know your rights as a debtor so you can be aware of any potential violations of debt collectors, however, these violations are few and far between.

Debt collectors will work with debtors to come up with an amicable solution because even though the recovery of a debt might take longer, it’s going to be significantly more effective than using bullying and scare tactics.

5. Using a debt collection agency will make me lose customers and clients

This misconception goes hand in hand with debt collection have a stigma attached to it. And while there may be the occasional person who might be wary if they find out a business uses a debt collection agency to recover debts. However, many customers also know that you do not pay for goods or services, then it is likely that a collection process of some sort will be in place, whether it is the business doing it themselves, or a collection agency.

In many cases though, it shows that you are serious about how your business operates. It is important that you use a reputable debt collection agency that has a strong reputation as operating ethically and legally – as well as being effective. Professional debt collectors are discreet, effective, and most importantly, respectful of the business they are working for. They do not operate in a way that will damage your business’ reputation.

So, now that we’ve helped clear up some of this misinformation, we hope that if you find yourself in a position where you’re having to recover payments from delinquent customers, you can see how beneficial it can be to work with a debt collection agency.

You can also learn more about outsourcing your debt collection efforts here.