Code of Conduct for debt recovery


Conduct for debt recoveryDebt collection is a common occurrence that happens in every business sector across the globe. It is part and parcel of the daily life of a business activity. Irrespective of how small, medium or large the running business is, debt collection is big part of it. One needs to raise capital for various reasons in a business – this is when a financial institution or a money lender is approached, and thus debt is incurred.


There are fixed intervals for payment and repayment of the loan. While these may constitute to a common part of a business concern, it is a huge task for financial institutions to ensure that debts are being recovered on time. Since financial institutions run on the principle of lending, a dedicated team of debt recovery agents of collectors are present in each such institution.


Not before you go into fast track mode and rev up your imagination thinking about hooligans and tough men to rough you up for payment, rest assured that such is not the case. In many countries, there are codes and legislations in place that ensure the obligations and duties of a debt recovery agent. To put it simply, it is a code of conduct for the debt recovery team.


Institutions that do not have a dedicated team, can hire people and outsource the job to others. Note that commercial agents for debt recovery Spain can undertake the task on behalf of your company. These are professional firms with an exemplary service unit who can bring about a lot of certainty and clarity in your business. Nothing in life be it professional or personal, can be carried out in a smooth and hassle free manner. There is always the possibility of problems and issues lurking around.


Here are few things you should be aware of that the agent cannot do –

Misrepresentation about his identity and organization
Claiming to be a law enforcement official
Calling you up at unearthly hours
Using foul language or expletives
Dealing with your other family members, colleagues or peers.


For a lending agency, debts are quite common. Recovery agents are trained to have ample patience. They believe in few words, which are actually effective. Even if the customer abuses the process and procedures, it is the duty of the debt recovery agent to maintain a healthy communication channel with the customer. They can strategize around the debt and figure out ways to get it fixed.


As a rule of business, it is necessary that you give the non-paying customer reasonable time to pay the debt. If, however, despite the passage of time, you still find your account empty, it is time to contact and intimate them about the debt. A very pertinent step you should take is always be in touch with the customer. Also, one can work with the customer to simplify the process in a way that the customer can pay. Maybe fix a 3-monthly payment cycle, instead of a monthly one. Such ideas go a long way in cementing the relationship with the customer. It is however important to keep the agreement terms in writing and to recap the same time and again with the customer.


Make sure that most of the communication takes place in writing. The customer needs to be made aware that you are keeping a record of everything, in case the situation turns diverse. Depending on the case and the type of customer you are dealing with, you should employ. Sometimes, fear tactics works, sometimes delay tactics work.


You must gauge the situation and accordingly take legitimate action.