Chasing an Unpaid Debt? Here’s How a Collection Agency Can Help

Whether you’re the owner of a small or large business, chasing after an unpaid debt can be an unpleasant experience. Not only is it time-consuming and emotionally stressful but it can also be a huge drain on your resources. More importantly, your chances of a successful recovery start to dwindle the longer the debt remains unpaid.

If you’ve had no success with your own collection efforts so far, then you may be wondering if a debt collection agency can help.

In this article, you’ll find out how a collection agency can initiate a fast, relatively stress-free, and compliant process to collect debts of any size on your behalf, giving you the freedom to focus on what you do best.

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  • There is Nothing We Haven’t Seen Before

No matter the size or complexity of your debt, there is nothing we haven’t seen before.

Using AMPAC Debt Recovery, you can submit a request to collect an unpaid debt of almost any value. Of course, the size of the debt will often determine the cost, as well as the most efficient and cost-effective way to collect the debt.

Some of the many circumstances the collection agency will take into account to help you determine the best recovery approach include:

  • The size and age of the debt
  • The debtors whereabouts (sometimes AMPAC needs to locate a debtor before recovery action can commence)
  • The debtors financial capacity to repay the debt
  • The debtors willingness to cooperate and repay the debt
  • The history and complexity of the debt itself (including any valid disputes)
  • The quality of your terms and conditions of trade and other credit documents

Any one of these factors can impact the likelihood of a successful recovery. Rest assured, your debt collector will take the time to assess your unique circumstances, and advise you on the best course of action as well as the costs and timeframes of each step.

  • Greater Authority

Some debtors may not take your internal collection processes seriously. They may ignore or dismiss your phone calls, text messages, emails, and other interactions.

However, when a debt collection agency gets involved, it sends a clear message to the debtor that you are serious about getting paid.

One way a debt collection agency establishes their authority is by sending an official demand for payment. Nowadays, most of these are sent by email. In clear, persuasive terms, the demand explains to the debtor that they have an unpaid debt, and that the collection agency now acts on your behalf. It also confirms the value of the debt, and that legal action may result if the debt remains unpaid, which may also result in additional costs being charged. Most importantly, it tells your debtor how to pay the debt and provides as timeframe for them to comply.

Receiving a letter of demand from a third-party – other than yourself – sends a clear message to the debtor that the matter is serious, and that there will be further consequences if they fail to respond.

In many cases, the payment demand is enough to cause the debtor to respond. They may agree to pay the debt in full or, if they do not have the financial means to do so, they may request a payment plan. AMPAC’s people have the skills and resources to assess a debtor’s capacity to pay, and if you agree to the payment plan, they will establish and manage this arrangement until the debt is paid in full. In many cases, this will also include payment of your debt collection costs.

What if the debtor still doesn’t comply? The collection agency will continue to liaise with the debtor by phone, emails, SMS and in certain cases, where the debtor is ignoring contact, they may visit the debtor to confirm whether or not they are still at the last known location and also to ascertain their assets, liabilities and general attitude towards paying their debt. This is called a ‘field call’, and when properly briefed, a Licensed Commercial Agent can gather very useful information to help determine the next steps in the recovery process.  

Sometimes it is necessary to commence legal action to get the debtors attention, and a collection agency can also assist in this regard.

  • Ethical, Legal and Fully Compliant Debt Recovery

In Australia, there are many rules and regulations that a debt collection agency must abide by in order to earn and maintain its license. These rules also include what the agency does with your money once it is collected. Debt collection agencies are required to hold a client’s money in a trust account, which must be independently audited on an annual basis.

All communication with a debtor must be carried out in a reasonable, legal and ethical manner, which means telephone and other forms of debtor contact are carried out in accordance with the Debt Collection Guideline for Collectors and Creditors as jointly produced by ACCC and ASIC https://www.accc.gov.au/publications/debt-collection-guideline-for-collectors-creditors Click this link to learn more.

In summary, you as a creditor, and AMPAC as a debt collector, cannot harass, intimidate or unreasonably threaten a debtor. Neither you, nor your collection agency can misrepresent themselves, and you must produce evidence of the existence of a debt when asked to do so. Contact with your debtor must be carried out during reasonable hours, and never in such a manner as to embarrass or jeopardise the employment of your debtor.

  • Locating Your Debtor

If you are unsure as to the whereabouts of the debtor, or they cannot be found at their last known address, AMPAC can utilise a range of ‘skip tracing’ tools to attempt to locate your debtor. Skip tracing is the term used by the collection industry for locating debtors who have moved. Sometimes debtors simply forget to notify their creditors that they have moved, and in other cases, debtors deliberately disappear to avoid their obligations.

When you work with AMPAC, you will have your own dedicated account manager, so you only have to liaison with one experienced and trusted person. They’ll help guide you through the collection process, including locating debtors who go missing. They will keep you informed on recovery progress and explain all the options available to you to help you recover your debt quickly and cost effectively.

When you enlist the help of a reputable, licensed debt collection agency, you can relax knowing the process is carried out ethically, and according to all guidelines and legislation. This is important, because the Agency acts on your instruction, and if they breach the rules, you can also be held liable for their conduct.

  • It’s Easy to Get Started

Setting up an account with a debt collection agency should be easy. Once you have completed AMPAC’s Service Agreement and Authority to Act, you can start sending your overdue debts in straight away.

If you use AMPAC, there are no upfront fees, annual charges or hidden costs – and you approve all expenditure in advance. This will give you confidence that you have selected an agency that will always act in your best interest – not theirs!

When submitting a debt, always include a copy of the credit application signed by the debtor as well as a copy of the unpaid invoices, and any other supporting documentation. It is also important to include all debtor contact information such as mobile phone number and email address, as this is often the best way to make contact.

AMPAC’s secure online portal allows you to attach all supporting information. If you have a large volume of debts to refer, this can be done by spreadsheet, whereby AMPAC uploads the data and recovery action commences on all debts simultaneously.

For advice and support on collecting an outstanding debt, click here to send your enquiry. Alternatively, call 1300 426 722. One of our experienced debt collectors will be in touch to discuss the circumstances of your debt.

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Ask a Question

Do you have debt that needs recovering? Are you unsure on where to start? Contact AMPAC Debt Recovery for solutions today and speak to one of our qualified consultants to get you started.