Credit Card Debt Collection

Credit card debt collection is on the rise with the current economic downturn. While fewer and fewer credit cards are being extended due to the current global credit and economic crisis, many were issued in previous years and now have delinquent balances from past use. In many cases, accounts that have previously been in good standing are now beginning to fall past due more and more regularly. Many consumers today are seeking debt consolidation, and particularly credit card consolidation as a relief to mounting credit card debt. Don't let your business suffer because your customers fail to pay their debts.

Read the latest credit card debt collection industry news, updated daily.

Your Right to Collect Debt

Credit card debt collection can be extremely tricky and difficult due to the many policies and legislation associated with the process. It seems that some customers view credit cards as their right and privilege. Once an account goes past-due the attitude of many debtors seems to be that their business to the credit card company is so important that they shouldn’t have to pay for their past purchases that were put on their card.

This is of course not the case. It is very important for credit card debt collectors to remind customers that they need to take responsibility for paying the legally incurred debt.

Most credit card companies spend only short periods of time – often not more than ninety days – trying to collect debts themselves. After their given time period, which should always be outlined in the policy and agreement statements the consumer has signed when the credit card is issued, the account is sent to a third party collection agency to be collected on their behalf.

Third Party Collections

When hiring a third party debt collection agency for credit card collection, the person from the agency assigned to the account can pursue the debtor in a few different ways. While laws do limit the methods of debt collection, there are still many legal ways to remind a debtor that an account is overdue and to seek payment. Learn more about credit card debt collection practice.

Generally the company first contacts the delinquent party by mail reminding them that a payment is due and telling them the amount owed. The customer is informed their accounts have been sent to collections. This collection letter must be very carefully worded to state that there can be resulting credit damage if the account remains unpaid, but it cannot threaten or harass, as this is illegal.

In a case where the debtor has a lawyer, all communications are moved from the debtor to that lawyer. The collector must communicate only with that lawyer from that point forward. It is also important to know that the federal legislation Fair Debt Collections Practices Act has created a clause that if a debtor sends in a written request to no longer receive communications regarding their debt, the request must be abided by.

Continue reading here.

Efficient Debt Collection Techniques

Written by Viky
(Chennai, Tamil Nadu, India)

Gathering information needed at the beginning is an absolute debt collection technique. Make sure of my debtors financial position. Keep frequent contact with your debtor. Use an application form to get your debtors basic information that you will need in the future.

First of all, the payment terms must be specified correctly in your invoices and quotes. Send them a written reminder in a complete gentle manner and remind them to pay their debts.

There should be no rough handling in these written reminders because it may end in a bad way. Also keep your final choice to hire a collection agency. Because a third party’s warning will be more effective than your own company’s warning.

Debt collecting can be done by the choice of threat, which is illegal. But it will lead some negotiable defects and it is not the right choice until the situation is under your control.

These techniques differ for every creditor company. You are encouraged to evaluate any recommendations made or offered, and accept and adopt the debt collection techniques. You should deal them with the correct technique at right time.

via debtcollectionsteps.com

3 Main Things To Consider When Hiring A Debt Collection Agency

by David P. Montana

To operate a organization profitably, every owner has to stay on top of their receivables and check their cash flow. Whether you promote a product or offer a service, you probably have to deal with late-paying or none-paying customers from time to time. That means that you have to have a sound, consistent internal debt recovery policy in place. Part of your policy should include knowing when to contract out problem accounts to a debt collection agency.

One significant reason this is true is because your delinquent accounts continue to depreciate, at a rate of 15% per month. And the longer an account goes delinquent, the more difficult AND costly it is to collect. In addition to spending more time, money and resources going after these depreciating accounts, its also costing your organization in lost opportunity dollars, by taking you away from your core revenue-generating functions. It is far more cost effective and efficient to outsource these difficult accounts to a impartial third party debt collection agency.

Below are three significant tips to think about when hiring a debt collection agency.

When hiring a debt collection agency, you ought to make sure they are licensed in the state(s) where your debtors are located. As collection laws can differ significantly by state, its to your advantage to look at collection agencies that are qualified nationally. Because we live in such a transient society, and with people moving across state lines regularly, its better to know a debt collection agency that is approved in all states are familiar with all the different laws and regulations. In fact, collection agencies can only collect in the states they hold a license in.

Fee structures can differ greatly with different collection agencies. Some offer prepaid, flat fee arrangements, as others charge a ratio of any monies collected, normally with no upfront costs required. Still others can propose some blend of the two. Depending on your establishment, there are advantages to either situation. Though there are upfront costs with flat fee based debt collection agencies, you can save a lot of money in the long run, since the collection costs tend to be a small percentage of the total dollars collected.

As your costs are set, you can also turn over problematic accounts sooner, when there's a better chance for recovering your money. Again, the longer you wait, the more difficult it is to collect.

Still, many organizations opt to give up a percentage of whatever might be collected to preclude the upfront dollar costs. Be sure to compare rates though: a debt collection agency can charge anywhere from 20-50% in contingency fees. One thing to keep in mind though: while you might be inclined to seek out the lowest fees, you should also know that if the fees are very low, it can mean the debt collection agency has inadequate staff, time and resources that they will dedicate to collecting your accounts. Although percentage fees charged are significant, success in total recovery is far more principal to your business bottom line. Whichever option you choose, make sure the debt collection agency you're considering spells out their fee structure clearly in writing.

Finally, when considering a debt collection agency, you need to think of them as an extension of your organization. Seeing as they will be collecting your money and acting on your behalf, its notable that they reflect your organization's viewpoint. For instance, if you manage a medical practice, your reputation in the community is something you value. You wouldn't want to associate with a debt collection agency known to engage in harsh, intimidating and/or inhumane behavior when handling patient collections. At the same time, you want a collection agency that while diplomatic, they are determined, steady and constant in their collections activity.

About the Author:
David P. Montana has published extensively and served as a business advisor in debt collection services for thirty years. David provides more beneficial tools and information about choosing the right collection agency.

12 tips for negotiating with debt collectors

 By Bankrate.com

When you bargain with a debt collector, you're going head-to-head with a tough, professional negotiator. Following these tips can help you come out ahead.

Learn your rights.
When collecting a debt from you, a debt collector must play fair.

A free consumer brochure on debt collection also is available from the National Consumer Law Center. Call NCLC's publications department at (617) 542-9595 and ask for a copy of "What You Should Know About Debt Collection."

Many states have their own debt collection laws. For more information, contact the attorney general's office in your state.
"When you know your rights, debt collectors know they can't get away with certain things," says Gerri Detweiler, author of "The Ultimate Credit Handbook." "They're less likely to try aggressive tactics."

First things first
Prioritize your bills.
No matter what a debt collector says, an unpaid credit card bill is not the most important bill you have to pay this month. Providing necessities for your family comes first.

"It does not make sense to put yourself in a position that you can't pay necessary bills," Detweiler says.

Estimate how much you can pay and offer less.
"Don't do anything you can't afford to do," says John Ventura, consumer attorney in Brownsville, Texas and author of the e-book "Stop Debt Collectors Cold." "And don't do anything dangerous."

Avoid sending postdated checks to a debt collector or agreeing to automatic electronic payments from your checking account.

"Presuming goodwill on the other side gets people in trouble," Ventura says.

Don't tell them your life story.
"Don't go into a lengthy explanation of why you can't pay," Detweiler says. "They don't have a lot of sympathy. This is what they do for their job. They hear down-on-your-luck stories day in and day out."

Control the information flow
Keep private information private.
Don't give a debt collector personal information such as where you work, where you bank or your checking account number.

"Say as little as possible and stick to the facts," Detweiler says.

Stay calm and focused.
No matter what a debt collector says, keep your cool and stay focused on the negotiation.

"The more in control you sound and the less you fall apart, the more likely you are to get what you want out of the negotiation," Detweiler says.

Tape the call if you can.
Flicking on a tape recorder is a great way to keep a debt collector in line. Plus, you get a record of the call.

Thirty-five states and the District of Columbia allow you to secretly tape your phone conversations. In the other 15 states, you can tape with the other party's permission. And if you tell the debt collector you are going to tape and he or she keeps talking, that's considered giving permission.

"Taping the conversation may keep them on their best behavior," Detweiler says.

Take notes.
File all collection letters and keep detailed notes of collection calls. Note the day and time of each call, the name of the collection agency, the first and last name of the caller and what was said.

"Make sure there's a record," Ventura says. "If you've made a deal with them, get proof."

Get proof of payment agreement in writing.
"Get it in writing," says Jerry Jarzombek, a consumer attorney in Fort Worth, Texas. "If they told you half of it satisfies the obligation and that's what you want to do, have it in writing."

Send a letter to the debt collector outlining the payment agreement. You'll want to send this letter via certified mail so you'll receive a receipt once the letter is delivered. Keep a copy for your records.

If you plan to pay by check, add the following disclaimer: "Cashing this check constitutes payment in full." Write this right on the check.

Timing it right
Wipe your credit clean.
Ask a debt collector to remove any negative information they've placed on your credit report. At the very least, insist that your account be listed as paid in full rather than paid in settlement. Once they agree, get it in writing.

Don't be rushed.
A debt collector will push and push for you to send them money immediately. Don't do anything until you have confirmation of a payment agreement in writing.

"Because you need it in writing, you have to resist all those demands and quick offers to do it overnight," says Mary Fons, a consumer protection attorney in Stoughton, Wisc.

Negotiate at the end of the month.
Because commissions for debt collectors are based on what they do each month, you may want to try negotiating near the end of the month. You could land a really good deal. 

Handling Debt Collectors: What are Time Barred Debts?

Handling Debt Collectors: What are Time Barred Debts?

"Time-barred" debts are debts so old they are beyond the point at which a creditor or debt collector may sue you to collect. State law varies as to when a creditor or debt collector may no longer sue to collect: in most states, the statute of limitations period on debts is between 3 and 10 years; in some states, the period is longer.

Federal law imposes limitations on how debt collectors can collect debts, including time-barred debts. Under the Fair Debt Collection Practices Act (FDCPA), a "debt collector" generally is any person or organization that regularly collects debts owed to others. The term includes lawyers who collect debts for others on a regular basis, but it does not include creditors collecting their own debts.  Most courts that have addressed the issue have ruled that the FDCPA does not prohibit debt collectors from trying to collect time-barred debts, as long as they do not sue or threaten to sue you for the debt. If a debt collector sues you to collect a time-barred debt, you can have the suit dismissed by letting the court or judge know the debt is, indeed, time-barred.  Old debts are usually purchased by scavenger debt collectors.

You can stop debt collectors from contacting you about any debt, regardless of whether you owe it, by writing a letter telling them to stop contacting you. Once the collector gets your letter, it may not contact you again except to say there will be no further contact or to let you know that the collector or creditor intends to take some specific action.

Importance Of The Fair Debt Collection Practices Act http://ping.fm/Vag0U

Know These Debt Collection Laws To Recover Your Business Debt http://ping.fm/AYM7w