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The ABC collection it your monney just ask for it

The ABC’s of Collections
It’s your money…just ask for it!
(But follow the law)

BUS 204

Credit & Collections
Spring 2006, sjh.


Three Easy Steps to
In- House Collection
1. Have a Written Credit Policy
2. Know Your Responsibility as
a Collector
3. Customize and implement an
effective collection system
The end result is increased cash
flow AND customer retention!



Choose your Methods

If you are charging a
finance charge on the
unpaid balance
notification should be
printed on your
invoice/or statement.

1. Cash
2. Check
3. Money Order/
Cashiers Check
4. C.O.D
5. Credit-card
6. Terms (in-house
credit)


Unfair Practices
 You MAY Not add any fees unless agreed
upon from the beginning of the debt.
 You may accept a post date check up to five
days in advance. (if longer, you must notify
the debtor3-10 days before cashing the
check)
 You may not initiate collect calls or
telegram fees.


Fair Debt Collection Practices Act
 Know your rights and the consumer’s rights
 The Act is intended to prohibit abusive
practices by debt collectors
 The Act has specific details regarding
communications with the consumer and what
is considered harassment.
www.ftc.gov
www.lawdog.com



Fair Debt Collection Practices Act
Prohibited Practices:
• Early morning or late night calls]
• Failure to cease communication upon
request
• Causing a telephone to ring continuously
• Communicating with consumers at their
place of employment


Fair Debt Collection Practices Act
Prohibited Practices:
• Contacting consumer known to be
represented by an attorney[6]
• Communicating with consumer after request
for validation
• Misrepresentation or deceit
• Publishing the consumer's name or address


Fair Debt Collection Practices Act
Prohibited Practices:
• Seeking unjustified amounts
• Threatening arrest or legal action
• Abusive language
• Communication with third parties
• Contact by embarrassing media
• Reporting false information on a consumer’s
credit report


Fair Debt Collection Practices Act
Required Conduct:
• Identify themselves and notify the consumer
• Give the name and address of the original
creditor
• Notify the consumer of their right to dispute
the debt
• Provide verification of the debt
• File a lawsuit in the proper venue


When Collecting Your Money

Follow the Four P’s
I. be Professional
II. Patient (it is a virtue, after all!)
III. Polite and courteous
IV. Persistent (within the

law)


When & Why to Use a Collection
Agency?
 Collection agencies know the
laws and methods.
 They normally will take 50% of
the total collected.
 You don’t have to be the “bad
guy”
 Statistically at 6 months past
due you will lose 65 cents on
the dollar.
 It often makes sense and cents.



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