Debt Collecting Agency Myths Busted

There are a lot of rumors that circulate around debt collection. Between unethical collection processes and media representing debt collectors as shady types that enjoy busting kneecaps, we’re not surprised that people have the wrong impression of debt collectors. We get so many questions about what commercial debt collection looks like that we decided to put together a list of the most common debt collecting agency myths—and bust them.

Myth 1: Debt Collectors Harass Debtors

Everyone’s familiar with the concept of the tough, threatening debt collector willing to resort to unethical or even illegal tactics to collect. While there are debt collectors who use underhanded tactics like 24/7 calling and contacting debtors’ coworkers and family, these strategies are ineffective and illegal. Some collectors will continue contacting a debtor after they send a cease and desist letter, which puts their clients and company at legal risk. The right debt collecting agency will never legally jeopardize your company.

Effective debt collectors have no need for shady intimidation tactics because debt collection is a collaborative effort. No amount of intimidation can help collect on debt owed if the debtor simply doesn’t have the money available. Excellent communication skills are key to helping collectors understand debtors and how they can motivate them. The right collectors will work with debtors through open lines of communication.

Myth 2: Debt Collectors Show Up At Doors

Many Americans see the same picture in their heads when they hear the term “debt collector.” They imagine a shadowy figure knocking on a family’s home, interrupting dinner time with threats of legal action, eviction, or worse.

While debt collectors did once knock on doors in the 1920’s, that practice is rare today. Not only is it impractical from a time-management perspective, but there are hundreds of different ways to make contact in 2022. While knocking on doors is technically still an option, cell phones, emails, and social media give collectors a lot of other ways to make contact.

The only time you can expect a debt collector to go knocking on doors is if they have a serious flair for the dramatic, in which case they probably aren’t effective collection agents.

Myth 3: Debt Collectors Force People Into Bankruptcy

Many believe that debt collectors enjoy pushing debtors to bankruptcy. The reality of the situation is that most debt collecting agencies are going to strongly advise their agents against driving debtors to bankruptcy. A debtor filing for bankruptcy is a worst-case scenario for a debt collection agency because it terminates any financial obligations they had to their creditors. This leads to the credit grantor and debt collector receiving very little to nothing at all in repayment.

The right debt collector will understand that people are in precarious financial situations if they’re failing to make payments and will avoid driving them to bankruptcy. This is why effective debt collecting agencies often train their employees on how to counsel debtors and work with them on flexible payment arrangements.

Myth 4: Debt Collectors Take From the Downtrodden During Economic Hardship

People assume that debt collectors love economic downturns because it translates to more unpaid debt. While there is more uncollectible consumer debt during economic downturns, those accounts are usually much harder to collect. As mentioned earlier, collecting from debtors who file for bankruptcy is impossible. Finally, a prolonged recession leads to less AR as a whole, which obviously means less to collect.

Debt collectors do not prey on the downtrodden either. Debtors come from every walk of life—a lot of people find them in circumstances where they’re suddenly unable to make payments. The types of people collectors most often deal with are those who’ve had lifestyle changes due to unforeseen circumstances, didn’t know what they were getting into with credit, or people who are trying to avoid payment.

Whatever the case may be, the right debt collector will work with these people to make sure that they’re able to make their payments on time.

Bust Myths and Expectations With Rapid Collections

Rapid Collections is here to help! We’ve been offering reputation conscious collection services since we were founded in 2003. If you need effective collection services that don’t compromise on ethics, turn to Rapid Collections as your next debt collection partner and build up your cash flow and also gain extensive knowledge on prevention and collection best practices.