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The truth about debt collection, your reputation and value for money

Everyone has thoughts and ideas about the debt collection industry, but are they accurate? Can you believe everything you hear? In this, the first of a series of blogs, we look at some of the common misconceptions relating to your reputation and value for money when recovering debt.

It’s natural to be cautious and have reservations about working with a debt collection agency (DCA) as there are many negative assumptions associated with professional debt collection.

But a good DCA will be able to offer specialist expertise and experience, as well as demonstrating a strong track record and a commitment to protecting your reputation and customer relationships.

Read on to find answers to some of the concerns which may be holding you back from getting the support you need to deal effectively with overdue debts.

A heavy handed approach will ruin customer relationships

Many people assume that debt collectors will be impolite, confrontational or even threatening.

In fact, while supporting you in chasing debts effectively, a good debt collection agency will also appreciate how important it is to protect your customer relationships. Employing a professional team of debt collectors with proven negotiation skills could even improve the reputation and integrity of your business.

You shouldn’t be afraid of taking action to ensure customers pay what they owe. It’s fundamentally sound business practice. A DCA could also help you to determine whether a customer faces temporary financial problems, ensuring you’re not at risk of alienating them.

There’s a risk of reputational damage

Many negative perceptions of debt collection come from aggressive tactics used in years gone by. But all debts, commercial or consumer, should be treated with professional integrity. A good DCA will operate in this way, with sensitivity and legal probity to safeguard your good name.

There’s also a flip side to the argument. If you fail to take effective action against defaulting debtors, you could be seen as a ‘soft touch’, which is an invitation to unscrupulous customers to delay payment. This issue could particularly impact businesses such as independent schools, whose customers are likely to be in regular contact with each other.

It’s not worth throwing good money after bad

Writing off a bad debt completely should always be a last resort. Instructing a DCA can represent good value for money because you’ll have a reasonable chance of getting at least a proportion of what you’re owed, which is better than nothing. What’s more, with a ‘no collection, no commission’ model, an agency will be motivated to get results.

There are sure to be hidden charges

When you’re struggling to recover money you’re owed, the last thing you want is to incur additional unforeseen costs. Many people think that debt collection agencies are likely to load their charges with hidden extras. However, a reputable debt collection agency will operate with complete transparency, clearly outlining all fees payable and terms of business. They won’t proceed without your full understanding and agreement.

It’s more worry than it’s worth

There’s nothing more frustrating than not getting paid for goods or services you’ve supplied, particularly for small and medium-sized business owners. Using a DCA can actually relieve you of the stress and worry of debt recovery. As specialists, they can give it the time needed and will be proactive, using their own initiative, while keeping you in the loop.

A debt collection agency that ticks all the boxes

At Redwood Collections, we offer a comprehensive range of debt collection and debt management services. We can provide you with reliable, cost-effective support and guidance, along with the confidence of knowing your reputation is in safe hands. It’s all about helping your business Grow Stronger.

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