Using a Debt Collection Agency Vs Independently Collecting a Debt

Using a Debt Collection Agency Vs Independently Collecting a Debt

Have you ever been in a position where someone owes you money but they refuse to pay?

Have you ever had a customer who you have provided a service for that is doing everything possible to avoid you?

If so, you will know exactly how frustrating and aggravating this can be.

When faced with a situation like this, many people are unsure of how to proceed.

The goal is always the same – recover the money that someone owes you.

How people do this depends on the perception of what is possible from the perspective of the person that someone owes money to.

For instance, some people take action into their own hands right away, confronting and chasing the debtor themselves.

As well as this, it is becoming more common for people to instruct specialist debt collection agencies.

These are the two most common choices, but which one is the better option?

If you are weighing up using a debt collection agency or trying to independently collect a debt…

…it is important to know exactly what you can expect from either option.

Frontline Collections has been providing the UK’s leading private debt collection service since 2005.

Our debt collection experts are second to none, and as such have an unmatched wealth of experience.

We asked them what differences there were between using a debt collection agency and independently collecting a debt.

Independently Collecting a Debt – What is Involved?

When people face the task of collecting a debt, many instinctively take on the task themselves.

This is understandable, as people and business owners alike perceive this to be…

…the fastest and cheapest way to recovering their money.

We should note that in some cases, this method can work.

Businesses have in-house credit control teams tasked with chasing outstanding payments.

Credit control teams can reason with some debtors, and the business in question will get a payment.

There are always those who will go to any length to avoid paying a debt, and you will need to escalate the matter.

A credit control team is also only an option for those that can support it.

People who are self-employed, or those who are acting as private individuals will not be able to use this.

When looking at the prospect of collecting a debt alone in more detail, it is clear that the opposite is true.

For example, recovering a debt alone can be a very costly activity.

You must spend time chasing the debtor, as well as learning what you can and cannot do.

Failure to understand the limitations of what you can do to recover a debt from a legal perspective can land you in hot water.

For instance, the law classes sending too many messages or calling too often as harassing the debtor.

Doing this will only cause problems, and it may also give the debtor grounds to not pay you at all.

Ignorance is not an excuse, and many over-eager creditors have pushed too hard, prompting police involvement.

Learning the best way in which to recover a debt yourself can take a long time, and this time represents a cost.

As well as this, when independently collecting a debt you will be unable to focus on value-based tasks.

For businesses or those that are self-employed, this should be a key point to remember.

If you are spending your time collecting a debt, then you will be unable to perform your normal tasks.

This prevents you from making money and growing the business.

Another important factor to consider is how independently collecting a debt will affect your relationship with the debtor.

If it is your money that someone owes to you, it is only natural to feel frustrated and angry when someone does not repay you.

These feelings can manifest themselves during the independent collections process.

This can affect how you perform communications.

For example, if a debtor becomes confrontational or difficult, it is easy to let your emotions get the better of you.

If a conversation turns into an argument, it may be even harder to recover your money.

This can become awkward if a friend or family member owes you money.

For business owners, a bad conversation can put future opportunities at risk.

Maintaining a professional and polite tone regardless of how the debtor is talking with you is key to success.

Many debtors will purposefully try to provoke you, hoping that your reaction will give them grounds to avoid paying the debt.

The task of independently collecting a debt can be too costly in most cases.

Many escalate this to a debt collection specialist after they have already spent time and money trying to collecting the debt alone.

Whilst independently can work in certain cases, it is always better to contact a debt collection agency sooner rather than later.

Instructing a Debt Collection Agency

Instructing a debt collection agency is becoming a more common practice than independently collecting a debt.

A professional debt collector will be able to enforce your debt, recovering any money owed to you promptly at a low cost.

Specialist agents will professionally approach your debtor…

…delivering a service to you that leaves all business and personal relationships unchanged.

The key benefits of this are that you can continue normal daily tasks without having to dedicate more time and money than is necessary to the collection.

For businesses and those who are self-employed, this is especially important.

Instead of chasing a debt in-house or paying many members of a credit control team to do so…

…business owners can focus on growing the business and making money.

Frontline Collections is the UK’s leading private debt collection agency.

Since 2005, we have helped thousands of businesses and private individuals alike recover money that someone owes them.

Our award-winning service provides an effective solution for recovering debts, and as such our average recovery rate is 90% on all undisputed debt.

Our debt collection experts specialise in recovering debt from all working sectors.

To reflect this, we have won awards such as the Independent Schools Association (ISA) ‘Gold Preferred Supplier’ status.

We are also accredited by the Credit Services Association (CSA), as well as the UK Debt Collection Bureau.

If you are thinking of independently collecting a debt, speak to one of our friendly debt collection experts today for some free advice.