10 Debt collection myths exposed!

There are many myths surrounding debt collection companies and what they “say” they can do to recover unpaid bills. Many of the myths prevent people from using debt collection companies to help them recover their money.

However, we are here to expose them! After all, the people who work for and own debt recovery companies are doing their jobs, hopefully professionally and with polite etiquette.

It’s expensive:

With the right debt collection company, it shouldn’t be expensive to recover your money. Make sure you use a “no win, no fee” debt recovery company. Make sure there are no up-front fees or hidden charges to pay.

Did you know, that under the “Late Payments Interest Act”, you can add a Late Payment fee to the debt amount owing? The fee added could cover your costs, (depending on the amount owed) of the debt collection agency fee.

The price you pay for the services of a debt collection agency is a lot less than writing the debt off completely.

>>Insert image of late payment charges that can be added

Debt Owed: Up to £999.00

You can charge: £40

Debt Owed: £1,000 to £9,999.99

You can charge: £70

Debt Owed: £10,000 or more

You can charge: £100

I will lose or upset my customer:

A good debt collection agency will do everything they can to retain your customer, if you wish to. When the process is respectful and professional throughout, the debtor is more likely to pay.

Often, bringing in a friendly but professional third party helps to resolve disputes more effectively.

At Franklin James, we have strong core values and a great ethos of how we work and who we work with. We do everything we can to recover monies where they are due, it’s a “principle thing.”

However, when someone falls on hard times with money, there are other alternatives available. For example, a formal monthly payment plan can be put in place to obtain your money.

Debt collection companies are only for large companies or large debts:

There are many types of debt collection companies. Some of them only specialise in certain industries and for debts over a certain amount of money.

Others provide debt recovery for various business industries and accept lower debt amounts. Don’t dismiss the debt recovery solution until you have looked at all the options available to you.

Franklin James Credit Management recovers debts from as little as £750.

A solicitor is more effective:

There is a time and a place for using a solicitor and sometimes they are necessary. However, to recover a debt at the start of a debt collection process, using a solicitor is not always the most cost-effective way to go about it. This is because it is rare for legal costs to be awarded in a “small claims” case, where the debt amount owed is under £10,000.

A good debt collection agency will often work on a “no win no fee” basis and be able to support you throughout a legal process. Often they are also affiliated with commercial litigation specialists for when they need their services.

It will damage my company and reputation:

Choosing the wrong company to work with could have an impact on your reputation. However, find a debt collection company who has excellent reviews, a good reputation and who will respect your company ethos and brand.

Speak to the people within the company before you assign any debts for them to collect. Perhaps even use a company who is recommended by a friend or business acquaintance.

Look for good communication, honesty and openness when making your decision.

The debt is over 6 years old:

This refers to the 1980 Limitations Act. This act suggests that a debt will become statue barred if the debtor has not admitted claim or made a payment.

Whilst this act can protect a debtor from being forced to make a payment, the debt is not simply “erased.” The debt is still owed, but the company is no longer able to chase the debt through the legal system.

Debt collectors only care about getting your money

They do care about recovering your money; however, this is not the only thing they care about.

80% of our new business comes from referrals, and surprisingly 10% of our new business comes from the debtors we contact, because “they liked the techniques we used to recover money from them.”

Ethical and professional methods are always used when recovery money. We care about delivering our job and ALL the people it involves.

So, when we are working to recover money, we are not only representing the ethos of your business, but our own too.

We believe that all people are important! Compromise, consideration and communication are the foundations of our existence here.

Debt collectors take goods away:

A debt collectors work is usually completed by call, email or letter. It is very rare for a debt collector to attend your property to remove goods in lieu of the debt owed.

Legally debt collectors do not have authorisation by the court to take property from a debtor, unlike a bailiff.

County Court and High Court Bailiffs can only be instructed to enforce once a Judgment (CCJ) has been granted and a warrant obtained.

All contracts and agreements must be in writing

Proof in writing, contracts and written agreements are not always necessarily needed to recover a debt owed…..Although it is ideal that you have written proof, even in the form of a text message or email.

The success of recovering your money through legal action will depend on the evidence you have to support your claim. You will need to prove that the amount you are claiming is due.

Debt collectors are hard, heartless and ruthless:

In our 30 years’ experience we have never yelled at or harassed anyone to recover a debt. There is an element that comes with the role of “debt collector” where sometimes “difficult conversations” must happen. However, our strong values and methods deliver a 90.7% success rate for our company. “Working together to find the right solution is key.”

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