It might seem that debt collection process is a result of the modern civilization. However the practice is as old as time, long before money ever existed, when people used bartering, exchanging goods or services for other goods or services. In case of an unpaid barter, debtors and their families were forced to provide physical labor until repayment.
In some cases, debts could take years to be repaid and sometimes, they could be passed on to the next generation of the debtor’s family. This practice ensured that debt slavery became common throughout many ancient civilizations, being an easy solution to more violent alternatives that could be imposed on debtors. In some Ancient societies, debts were cancelled, reaching a time limit or during special events.
In debt collections the self-service functionality starts to be embraced by more and more companies in all industries. The trend is clear and the results appear fast. It seems that telecom and insurance companies have been the first to provide self-service to their customers. Banks have been very fast in following the market trend as well.
When is the time to work with a debt collection agency?
It is not a “one size fits all” approach. Most of the companies make the first collection actions in-house. The definition of the “first collection steps” can be different from one company to another.
What are successful companies doing before debt collection system implementation in order to obtain great results?
Frequent approaches are somewhere between two extremes: