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Credit Holds
Some companies give collectors unilateral authority to place accounts on credit hold, and then are surprised when customers and salespeople complain that credit holds are applied heavy handedly. The collector may be the first person to suggest a credit hold, especially if a customer's unwillingness to issue payment is damaging the collector's ability to meet their performance metrics.
Credit holds should be used infrequently. Often the threat of a credit hold is enough to persuade a reluctant customer to pay the outstanding debt. Sometimes, a debtor’s accounts payable department will be told to hold payments until and unless a creditor threatens to place the account on hold. Therefore, giving customers advanced notice of a credit hold is a collection technique. Knowing that credit holds can damage customer relations beyond repair, it is best to have at least one sign-off before a credit hold is placed on an account.
© 2011 by Michael C. Dennis. All Rights Reserved