Debt collection	print page
Created of: Lars Helge Eide (updated: 20.05.2005)

How Debts are Collected   There is no “one” course for the collection of a debt - it will depend on whether it is a consumer or business debt, the debtor’s financial situation, and the size of the debt. However, there are four main collection methods - of varying effectiveness - which are mostly used in combination: Lettering, telephoning, litigation/legal action, Door-to-door/Personal.   A typical process would be:   1. Receive Bad Debt 2. Scoring/Decision Tree to classify the debt 3. Strategy for collection     (a) no action/written off     (b) Letter &/or telephone     (c) Legal action     (d) Doorstep Collection     Commission/Contingency Collections - Commercial - As with Consumer Debt above, except that commercial debt collection agencies are inclined to be more locally focussed. Typical commission rates for commercial debt range from as low as 0 % to as high as 20 %. Depending on age, quality and actions taken previously, average commission rates normally are between 0 % and 20 %.   Tracing - Locating and confirming the address of debtors who are suspected, or known to have absconded from their last stated address.   Court Action - The provision of litigation services. Agencies normally provide these through solicitors working for them.   Card Recovery - The service relating to the recovery of 'plastic' cards and cheque books on behalf of creditors.   Repossession - The seizing of assets.   Process Serving - Any legal documents that are required to be served personally on on respondent/defendant who is the subject of legal action.   Status Reports & Investigations - The provision of a detailed report on the personal and/or professional circumstances of an individual, or an analysis of the current state of a commercial organisation.   Outsourced Recovery Services - This refers to the provision of arrears management services that effectively replace part, or all of a client's in-house recovery operation.   Debt Purchase - The acquisition of a debt "book" already managed by the agency on a commission basis, or the acquisition of balances which are managed within the client's environment. It could also include "written off" or "historic" debt.   Consultancy - A wide range of services ranging from strategic advice to project management.   Training - Predominantly relating to collection methods and techniques.   Invoice Discounting - The process of turning newly raised invoices into cash. A certain percentage is advanced to the client on the basis that when the invoice is paid, the advance, plus an administration fee is paid to the agency.   Asset Tracing - Normally arising as a result of bankruptcy, where an individual or group have attempted to disguise or hide assets to avoid seizure by creditors.   Credit Insurance - This insurance can protect companies from their customers' insolvency or inability to pay. Debt Collection  Lillehammer Inkassobyrå AS have a highly motivated team of negotiators with a passion for their job. Tact, persistence and an understanding of people's circumstances are essential to working with account holders to establish a sensible debt repayment plan. Our policy is one of constructive negotiations with the account holders taking into account individuals' personal situations and thereby achieving the optimum result for all concerned. The majority of our collections activity is letter and telephone based. Professionally scripted letters are printed and sent to the relevant account holders and then our dedicated team of negotiators follow up with phone calls. Once these core avenues have been exhausted, selected accounts will be sent to field agents for personal representation at a local level. This action is only carried out if we believe it will be performance enhancing overall. Our dedicated trace and legal teams direct all their expertise, with great success, in helping clients find account holders who have moved away or identifying accounts that are best suited to legal actions to recover the debts. Having identified the appropriate actions they then individually take responsibility to manage the account to the required conclusion.