When someone goes far enough in debt, usually 60 days or more past due, it’s not uncommon for financial institutions to enlist the help of debt collection services to get their money back.
But why do debt collection agencies have a higher success rate than a financial institution would? What is it about them that makes them so much more effective that it is worth hiring their services? Let’s find out:
- Better At Locating People
A financial institution ultimately doesn’t have the same capabilities and tools for finding people that a dedicated collection agency does. As a matter of fact, some of the bigger debt collections agencies have people or even a whole department dedicated just to tracking people down, wherever they may be on Earth, and getting a hold of them. It’s amazing how hard it is to hide from these people, honestly. Leaving the country is no longer a way of getting out of paying a bad debt anymore.
- Six Degrees Of Separation
Just the fact that these organizations have no personal stake in the debt makes them able to act more objectively than an actual creditor ever could. In this business, impartiality and objectivity are key elements in dealing with people who have past due debts. It has been shown that even employees of banks where people owe the bank money tend to take the bank’s side in matters, to an extent that they wind up being rude or angry with them. This is never a good idea, as it is almost always counterproductive
- The Specialization Factor
Debt collection agencies employ people who are really good at what they do
. They are better at dealing with people who owe money, because they do it all day every day. They are trained in only this, and everything to do with this. So they know all the legal ins and outs of the subject matter. This alone makes it worth it for the banks to pay them; the avoidance of potential legal mistakes is a big advantage to using a debt collection agency.
- Experts At Litigation
If debt issues become really severe and it’s time to actually go to court, debt collection agencies once again have all the experience with this type of thing, much more than any other type of entity ever could.
Litigations are long drawn-out expensive and uncertain procedures for both parties, so they are best avoided under most circumstances, but if it does come down to such a thing, a debt collection agency is the entity most apt to getting the best outcome possible in these situations.