In recent years, there has been an increase in technological advances that have helped debt collectors do their job better. However, these technologies have not made the old ways obsolete. There are still plenty of situations where face-to-face meetings are necessary and beneficial to both parties.
This post will break down the pros and cons of modern debt collection vs. face-to-face debt collection.
Face-to-face debt collection
Face-to-face debt collection is the process of contacting a debtor in person to arrange payment. The debt collector may visit the debtor’s home or place of work, or they may ask them to meet at a neutral location.
Pros of face-to-face debt collection
The face-to-face collection allows debt collectors to make more money by talking to debtors about their payment options. They can also use it as an opportunity to build trust with the person they’re trying to collect from.
If you have been sending letters or making phone calls without any response from your debtor, sometimes meeting with them in person can be more effective than other methods of communication.
Cons of face-to-face debt collection
The biggest disadvantage to this method is that it can be awkward and uncomfortable for both parties. Some collectors will use intimidation tactics, which only makes things worse. This type of debt collection has also been known to cause violence against collectors or their families by angry debtors who feel threatened. This can sometimes lead to legal trouble for both the debtor and the debt collector.
Modern debt collection techniques
Modern debt collection techniques typically involve:
• Automated messages and calls
• Software that helps businesses track their debtors and send them reminders
• An overall shift toward digital practices
These tools have helped many businesses improve their cash flow and increase recovery rates.
Pros of modern debt collection
Modern debt collection techniques are more cost-effective for collectors. They can reach many more debtors from the comfort of their office than they could ever manage in person. It also provides a safer environment for both parties. Collectors don’t need to worry about getting into fights with irate customers.
Cons of modern debt collection
People are less likely to respond. This can increase the amount of time it takes to collect a debt. It may also require more effort on the part of the creditor. Additionally, laws need to be considered when choosing which methods of communication to use for debt collection purposes.
The best way to maximise your debt recovery is to combine traditional and modern techniques.
Don’t waste your time on your debtors. Let us do it for you. Contact us today for a free quote.