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Recovering delinquent debt drains resources, and the recovery process often fails. With the time, money and manpower spent on debt collection, many businesses find it more appealing to hand off delinquent accounts to a debt collection agency rather than face the negative impact on the company.

Of course, taking steps to increase success with in-house debt collection can be a rewarding endeavor. With skill and determination to succeed, businesses can achieve great results in pursuing delinquent debt on their own.

One of the most important things to do is to start the debt collection process early. Rather than waiting until the debt is delinquent, call the debtor as a reminder to pay the bill on time. This can significantly decrease the number of delinquent debt portfolios the business must deal with.

Contact the debtor as soon as possible once the payment is delinquent, preferably within the first ten days. Waiting thirty days allows the process to fall behind. Debt collection is most successful when approached swiftly. Call the client to remind them of the late payment, assuring them they will also receive a reminder, and send a letter immediately.

Be courteous on your first attempt. However, as time passes and more frequent contact is required, be firm with the debtor, letting them know in no uncertain terms that the payment will not slide unrecovered. If the point is driven home more securely, the debtor is less likely to blow it off.

One way to increase the bottom line is to pursue smaller debts first. These are more easily recovered because it is more likely a debtor can pay the smaller sum immediately. Debt collection is a more difficult task with larger sums, since these are often harder to gather and sometimes require working out a payment plan.

Continuing to extend credit to delinquent debtors is a mistake. It doesn’t provide motivation to clear the record if the debtor can still receive the goods or services they need. Rather, cutting off credit lines until the debt collection process is complete will show the urgency of paying off bad debt so they can continue to make the purchases they need to function.

With some determination and logic, a lot of time and money can be saved in the debt collection process while increasing the amount recovered in the pursuit. Being sure to stand firm in the resolve to reclaim lost money is essential to the success of the endeavor.

Next, discover more valuable facts and resources on debt collection, in addition to collection agency options and collection agency solutions.

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The Fair Credit Reporting Act impacts every business. This is because the FTC requires businesses to report accurate information about debtors who owe money. Every business owner responsible for handling internal debt collections needs to understand The Fair Credit Reporting Act.

Organizations that fail to adhere to these laws might be risking costly fines. And in some cases, debts owed to them could be discharged. Debt collection is a difficult process. However, it is very important for any business handling debt collections to fully understand the law.

The Fair Credit Reporting Act

A business needs to understand the Fair Credit Reporting Act. This act states that consumers have the right to verify the information on their credit report. It also states that businesses must ensure that the information on these reports is accurate to the best of their ability. It is essential the business understand this part of debt collection.

If your business receives a complaint from one of the national credit bureaus (Equifax, Experian or TransUnion), you have a 30-day period to verify the accuracy of the alleged debt owed, or it has to be removed off the individual’s credit report, as per The Fair Credit Reporting Act.

In regards to debt collection, The Fair Credit Reporting Act is crucial to understand. If you file an inaccurate claim, you face possible legal ramifications if done so intentionally. Moreover, The FTC can possibly limit your abilities to file future claims.

However, The Fair Credit Reporting Act does work to the benefit of your business as well. As long as the information is reported accurately about the debt, it can and should be used by the business so that other businesses know of this individual’s negligence in paying their debt. This is information other businesses will certainly want to know before working with this potential customer.

Some Important Facts

For any business responsible for debt collection, much needs to be known about The Fair Credit Reporting Act. If they provide consumer information to the credit reporting agencies, they are also responsible for submitting only accurate information. These laws have been recently updated to expand the rights of consumers.

Consumers are within their rights to know what is contained in their credit report. They can request a copy of their report from the credit reporting agencies. If it contains any information deemed inaccurate, like missing or wrong account information, debt collection activity, or inaccurate history, the business has to prove the accuracy of the debt, or it is removed from the credit report. The Fair Credit Reporting Act places the burden of proof on the business claiming that the debt is owed.

Negative, but accurate, information can remain on one’s credit report up to seven years. Bankruptcies can stay on up to ten years. Criminal convictions, or information related to employment applications for jobs with salaries over $75,000 can remain even longer.

Next, explore more important information and resources on debt collection laws, as well as collection agency services.

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