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Making Effective Debt Collection Calls


This article was excerpted from “Become the Squeaky Wheel” by Michelle Dunn.

Michelle Dunn, author of an award winning book has spent the last 18 years stepping into dangerous debt collection potholes. She shares her hard-won expertise on debt collection with the titles in her “Collecting Money Series.” She is the founder and president of Never Dunn Publishing, LLC and her 10 year old Credit & Collections Association with over 1075 members. She is a writer and consultant that has a contagious passion for her work. Michelle started and ran M.A.D. Collection Agency for 8 years. Visit www.michelledunn.com or www.credit-and-collections.com for more information.



Before you ever make a collection call, you need to look in the customers file or in the computer at their account to see what has been done. Any time you speak to a customer, you need to make a note in the comments screen or in their file. You should always put the date first and then what was said. Then if you call a customer or they call you, you have the information instantly. Some programs have a notes section you can add notes to, some programs also will automatically put in the user and date and time in when you begin to type. This is very important. This way, if you leave a message and the debtor calls back, anyone who answers the phone will see who spoke to them last, on what day and time and what was said.

Once you place the call, you must only speak to the owner of the business or an authorized bookkeeper if the account is a business. If the account is a consumer debt, only speak to the person who owes the money or signed the credit application or contract. NEVER discuss past due accounts with an unauthorized person, such as a receptionist, neighbor, friend, or relative.

Once you have the owner or debtor on the phone, identify yourself and your company, and state the purpose of your call. If the customer tells you they cannot pay anything, listen to their story and then explain that you understand that they cannot pay the whole balance at this time, but that you do need a payment. (Start at 80% and go down from there).

At the end of the call, repeat the payment schedule to the debtor and make a note in the customers account. Whenever you make a payment arrangement like this, you need to send a follow up letter the same day with the same information in the letter. A good idea is to include a payment envelope with the letter. The easier you make it for the debtor to make a payment, the better your chances of being paid. You may even want to provide a postage paid envelope or at least an envelope pre-printed with your company address.

These letters need to be kept in a tickler file with a follow up date written on them, usually a week later. Then on that day you need to pull the letters and check to see if the customer has paid you. If they have not, you need to call them again. If they have made a partial payment, you need to send a letter thanking them for that payment and telling them when you expect the next payment. Put a copy of the letter in your tickler file with a date of a week later to follow up. If possible, fax or email the invoice so they have it immediately then call right back, to verify they received it and get a date the check will be sent. Always try to get a check number. Call back the day they say they are going to mail it and verify it was mailed that day.

The first collection call should be made when an account is 45 days old. (Based on terms of net 30) This should be a friendly call to remind them about the bill and make sure they have a copy of the invoice. You will also ask them when the check will be mailed or if it has been already. If it has been mailed, get a check number, amount and date.

The second call would be made if payment is not received within a week or two.

This call would refer back to the first call, where there wasn’t a problem and they were going to send out the payment.

The third and any following calls will be made if payment is not received within a week of the second call. These calls would be made weekly until there is a satisfactory payment schedule.

Before making any collection calls, check the comments screen of the computer to see if there are any comments that could be helpful with the call. Any time there is any interaction with a customer, a notation must be put in the comments screen. Always put the date first and then what was said. This way, if a customer calls you back, you have the information instantly, and it is available to anyone else who may get the call. Once the call is placed to the business, only speak to the owner or an authorized bookkeeper. NEVER discuss past due accounts with unauthorized personnel, such as a receptionist.

At the end of the call, repeat the payment schedule to the debtor and make a note in the comments screen or in their file. Whenever a payment arrangement is made, a follow up letter must be sent confirming the payment schedule. You can also enclose a payment envelope, the easier you can make it for the debtor the better your chances of being paid.

Making collection calls is somewhat of an art. Once you do it long enough you can almost anticipate what the debtor is about to say. You need to be on top of things and know what to say to every response while maintaining professionalism and staying within the law. You must be ready to ask questions about whatever answer the debtor may give you. You must be ready to provide a solution so they do not have a way out of paying. If you don’t have an answer ready, they will give you another excuse.

Created on 31-Mar, 2011 by HKCCMA.

Last Edited on 09-Apr, 2011 by HKCCMA.