If your business has outstanding delinquent accounts, you may be wondering if it’s worth hiring a professional debt collector to handle them. The answer is yes!

Hiring a professional debt collector is an effective way to collect on delinquent accounts and protect your bottom line. If you’re not sure where to start, contact us today and we’ll put you in touch with one of our experienced partners.

The many benefits of hiring a debt collector to handle your delinquent accounts

When faced with delinquent accounts, business owners may feel overwhelmed and unsure of where to turn. The best decision any kind of business can make is to hire a debt collection expert who can handle the situation professionally and efficiently.

Debt collectors have the tools and experience to successfully navigate complicated credit law and regulations. After reviewing your accounts, they will devise the most suitable form of debt recovery while taking into consideration your time limits, legal obligations, and financial stability. Here are some of the many benefits that come from working with a debt collector in your business:

• Expertise and Experience: Debt collectors have extensive knowledge and experience in dealing with various debt situations. They are well-versed in the relevant laws and regulations governing debt collection in Australia, including the Australian Consumer Law (ACL) and the Australian Securities and Investments Commission (ASIC) guidelines. This ensures that the debt collection process is conducted lawfully and ethically.
• Increased Debt Recovery: Debt collectors have established strategies and techniques to effectively communicate with debtors and negotiate repayment plans. They are often more successful in recovering debts compared to internal collection efforts by businesses or individuals. Their professional approach can motivate debtors to prioritise repayment. In addition to their experience and knowledge, one of the reasons debt collectors are often highly successful in recovering debts is because they will not be paid for their services unless they successfully recover debts, which offers extra motivation for the debt collector.
• Time and Resource Savings: Debt collection can be a time-consuming and resource-intensive task. By outsourcing this responsibility to a debt collector, businesses can focus on their core operations and save valuable time and effort. Additionally, debt collectors have access to specialised tools and resources that can streamline the collection process.
• Legal Compliance: Debt collectors are well-versed in debt collection laws and practices specific to Australia. They ensure that all collection efforts are compliant with the ACL and other relevant regulations. This minimises the risk of legal issues arising from improper debt collection practices.
• Maintaining Customer Relationships: When businesses use a debt collector, they can maintain a professional distance from the debt recovery process. This can help preserve the business-customer relationship, as the debt collector acts as an intermediary, handling the delicate issue of debt recovery.
• Improved Cash Flow: Recovering outstanding debts promptly through a debt collector can significantly improve a business’s cash flow. This infusion of funds can be crucial for meeting financial obligations, investing in growth opportunities, and maintaining a stable financial position.
• Flexibility: Debt collectors offer customisable solutions to fit the specific needs of the creditor. Whether it’s collecting on a single overdue account or managing an entire portfolio of delinquent debts, debt collection agencies can tailor their services accordingly.

For more information on what you can expect if you choose to work with JMA for recovering debts in your business, read this article.

How debt collectors can help you get your money back

Debt collectors are a valuable asset for those looking to reclaim money owed to them and there are various recovery methods that they may take. To give you an idea of the process of working with a debt collector, here’s an overview of what you can expect:

Contacting the Debtor

Debt collectors will attempt to establish contact with the debtor through various channels, including phone calls, letters, emails, and text messages. They may also attempt to reach the debtor at their place of work or home. The initial contact typically involves notifying the debtor about the outstanding debt, providing details of the creditor, and expressing the intention to collect the amount owed.

Verification of Debt

Upon the debtor’s request, debt collectors are required to verify the debt’s legitimacy and accuracy. They must provide written documentation, such as the original loan or credit agreement, outlining the amount owed and the creditor’s information.

Negotiation and Payment Arrangements

Debt collectors are skilled negotiators. They work with debtors to find mutually acceptable payment arrangements that consider the debtor’s financial situation while ensuring a steady path to debt resolution. This could involve setting up installment plans or negotiating lump-sum settlements for a reduced amount.

Educating Debtors

Debt collectors may educate debtors about the consequences of non-payment, such as potential legal actions, damage to credit scores, or negative impacts on future loan applications. This is intended to encourage debtors to take their debt obligations seriously and prioritize repayment.

Skip Tracing

In cases where debtors have changed addresses or contact information, debt collectors may use skip tracing techniques to locate them. They employ various databases and investigative tools to track down debtors and re-establish communication.

Compliance with Debt Collection Laws

Debt collectors must adhere to strict legal guidelines and ethical practices. They must not engage in harassment, threats, or misrepresentation to collect debts. In Australia, debt collection practices are regulated by the Australian Securities and Investments Commission (ASIC) and must comply with the Australian Consumer Law (ACL).

Use of Technology and Automation

Debt collection agencies often utilize technology to manage large volumes of debts efficiently. They may use automated dialing systems, customer relationship management (CRM) software, and digital payment portals to streamline communication and payment processing.

Legal Action as a Last Resort

If all attempts to collect the debt amicably fail, debt collectors may recommend legal action. This involves pursuing a court judgment against the debtor, which can lead to wage garnishment, asset seizure, or other legal remedies for debt recovery.

Reporting to Credit Bureaus

Debt collectors may report the debtor’s delinquent account to credit bureaus. This can negatively impact the debtor’s credit score, making it challenging for them to obtain credit in the future until the debt is resolved.

What to look for when choosing a debt collector

When choosing a debt collector, you should look for a professional and reliable organisation like JMA Credit Control that can ensure maximum efficiency.

When selecting a debt collector, consider these factors:

• Reputation and credibility: Choose an agency with a solid reputation and positive reviews.
• Licensing and compliance: Ensure the agency is licensed and follows debt collection regulations in your area.
• Experience and expertise: Opt for an agency experienced in handling similar debts.
• Negotiation skills: Look for professionals who can negotiate effectively with debtors.
• Communication and updates: Ensure the agency maintains transparent and regular communication.
• Efficient tools: Inquire about their debt management technology and resources.
• Ethical practices: Verify that the agency adheres to ethical debt collection practices.
• Clear fees: Understand their fee structure and compare with other options.
• Insurance coverage: Check if they have liability insurance for added protection.
• Customer service: Choose an agency with strong customer support.
• Data security: Ensure they comply with data security and privacy regulations.
• Flexibility: Look for an agency that can customise solutions to your specific needs.

Finding the right debt collector for your needs requires research, but in the end it will lead to successful collections and improved cash flow.

The Takeaway

Hiring a debt collector can be the right choice for businesses struggling to collect on delinquent accounts. It is important to carefully weigh all options before signing a contract and always look for experienced, knowledgeable collectors with stellar reputations such as us here at JMA Credit Control.

If you need help in your business, get in touch with us today by calling us on 1300 664 223 or get in touch with us here. We can help you no matter where you are in Australia.