Ethics of debt collection The perception by the public of a function or a poorly known activity often comes down to a cartoon from a few extreme practices used by a minority of players. Many examples illustrate this reality.

This is particularly the case of debt collection, with the difference that the practices that negatively manufacture its image are common:

  • excessive intimidation, harassment are the two ingredients used to bring a debtor to pay a debt that is anything but certain, or that we have not the means or the desire to demonstrate that it is.

  • repeated mails that scare from "in appearance" legitimate actors, repetitive phone calls accompanied by threats of legal action that are in most cases intended to intimidate and to psychologically force the "debtor" to pay when it is clear that it will never be implemented.
It's the easy way out, the perverse weapon of the weak which prevents the real substantive issues, to the detriment of the debtor who undergoes the assault and the creditor who can not identify the causes of the problem and improve its sales process:

  • why is the debt not paid?

  • what changes should be made in my sales conditions to prevent this happening again?

  • what are the internal problems that explain non-payment? Customer dissatisfaction, delivery problems, quality?

  • if the buyer is insolvent, why I did not identified it upstream? How to do it? How to secure the payment in this case?

  • …etc.
Such abusive practices are ineffective even if they sometimes allow to obtain payment, they often result in the loss of the customer, when a more professional approach would have made possible to keep him.

  • My DSO Manager

    Ethics in My DSO Manager

    My DSO Manager promotes healthy recovery practices that are respectful of companies and persons. My DSO Manager prohibits any practice that amounts to:

    • harassment: multiplication of dunning actions over a short period while nothing justifies them,

    • unsubstantiated threats: abusive threats of actions of bailiffs or lawsuits while the claim is not undisputed or that the creditor is not able to prove that the debt is not disputable.

    Know more.

What is a professional debt collection?

It is a customer-friendly approach that highlights the substantive arguments to be paid. It is performed with a consistent timing between recovery actions that allows the exchange with the buyer while applying a pace that reflects the seriousness of your management.

This does not prevent to be firm, quite the contrary. The actions are all the more strong that they are supported by all the necessary elements (contract, delivery note, invoices, GTC signed by the customer ...) to demonstrate the exigibility of the bill and its incontestability.
In fact, the collection is a business management tool, of its cash and its working capital. It is too often untapped source of continuous improvement of internal quality whatsoever on administrative plans, logistic or quality. Each bill late is the result of a malfunction which is an opportunity for improvement.
Abusive practices should be avoided in the interest of the creditor and the debtor. These methods are sometimes used to "clean up" old debts that were never properly managed and for which the seller has no more supporting documents.

In this case, the "negligent creditor" would do better to make sure not to end up in this situation in the future rather than resort to such dubious methods that harm its image and credibility.

Ethics in debt collection includes simple principles:

  • respect of the debtor. The actions are clear and argued always respecting the people

  • only debts which are due and certain (ie not contestable) enter the recovery process. If a dispute is identified, the collection is suspended until a response is given to the customer

  • no harassment or practices close to harassment

  • no intimidation or undue threats

  • preferred negotiation to confrontation as soon as the debtor is in good faith
Beyond the obvious moral aspect, the application of these principles is first in the interest of each party, and of all a profession that certainly needs to change its image.
Date: 08-24-2015 - Author: Bertrand Mazuir
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