Being in debt is not an uncommon thing today. On the contrary – almost everyone has some kind of debt. If we don’t have money on us right now, but we are fairly sure that we won’t have any difficulties repaying it later, we take out loans. Student loans, mortgages, or a loan to buy a new, multifunctional new toaster – we couldn’t imagine our lives without those. Unfortunately, the only constant thing in life is change, and things happen in our lives that change our situation. If we are unable to pay our debts off, the companies that we owe money to will send us reminders about our late payments. If it doesn’t bring any effects, they might hire a debt collection company.
Debt collection companies don’t have a wider array of possible methods through which the money can be recovered. Instead, their higher success rate is a result of several factors. The companies that rely on their services don’t know the best way to achieve this goal, whereas debt collection companies have experience with dealing with difficult clients. Their entire business model is based on debt collection, which means that they can focus their efforts solely on ways to collect the debt.
After contacting the customer, they attempt to negotiate the terms of the payment plan. It can be done through a number of means. The repayment can be made via cheque, or a debit card, or a credit card. Card collections are often a preferred option, as bank accounts may have restrictions placed on them.
Card processing companies are wary of doing business with companies with a significant number of refunds and chargebacks. Still, debt collection companies want to increase the possibility that their customers will repay the debt, which means that they often agree to unfair terms. To learn more about this subject, check out the infographic.