Debt collection can be a taboo subject. There exists a lot of misinformation regarding debt collection on the internet. So, this blog is here to set the record set.
Here are the eight biggest B2B debt collection myths busted:
MYTH| You can pay the real creditor instead of the debt collector.
Other companies hire third-party debt collection agencies to collect from them. Or they sell off their debt to a collection agency, defining that the original creditor no longer owes the debt.
Either way, the debt collection agency is contacting you for a reason, and you cannot bypass them.
The good news is that most B2B debt collection agencies make it as simple as they can for debtors to repay their debts. Most provide several payment choices, such as a payment plan or an online payment gateway.
MYTH | If you pay a collection debt, it won’t affect your credit score.
Your credit score has most likely already been harmed before a bill enters collections. You risk doing more harm if you don’t cooperate with a collector. The best course of action is to pay your bills on time and stay out of collections completely, but if a collector contacts you, just comply and pay or explain your circumstances.
It’s a debt collector’s job to resolve the debt, so they are most likely willing to work with you and figure out some options for how you can pay the debt.
MYTH | Collectors will leave if you steer clear of them.
It will only make things worse and hurt your credit if you refrain from collecting calls. Additionally, creditors might be useful by offering you other ways to pay off your debt. It’s best to work with collectors and make an effort to explain your circumstances.
MYTH | All debtors are protected by the Fair Debt Collection Practices Act.
The Fair Debt Collection Practices Act (FDCPA) “restricts the behaviour and actions of third-party debt collectors who are trying to collect debts on behalf of another person or company,” according to Investopedia.
In essence, the FDCPA shields borrowers from unfair, abusive, or dishonest debt collectors.
The FDCPA, however, only covers consumer borrowers; it does not cover business debtors.
Although there are currently no federal rules that regulate the collection of commercial debt, the majority of states have legislation that does.
MYTH | Smaller debts are not subject to collection efforts.
While some B2B debt collection agencies ignore smaller debts, others focus on collecting them because they can pile up over time to generate respectable revenue.
It is impossible to predict whether a debt will be collected or not.
Anything can basically go into collections and lower your credit score. Therefore, it’s preferable to simply make your debt payment.
MYTH | Debt collectors just want your money, not anything else.
It is the responsibility of debt collectors to do more than merely collect the debt.
They will work with you to develop payment arrangements and suggest debt relief options.
So, if a debt collector contacts you, find out what your choices are and what they may do to assist.
MYTH | It is expensive to work with a collection agency.
The majority of collection agencies work on a contingency fee basis, which means you don’t pay if they don’t collect. However, some will impose a flat rate.
Hiring a B2B debt collection agency is hiring professionals who can boost their sales by recovering more money for their clients.
MYTH | Companies who hire collection agencies experience a loss of clients.
You won’t lose clients if you pick a reputable collection agency. Of course, this would only be the case if the collection agency employed unethical debt collection methods, such as intimidation or threats.
Before you hire a debt collection agency to recover all your past dues, thoroughly study their market status and choose wisely.