Do's and Don'ts of Business to Business Debt Collection, Debt Collection Practices

There are just as many Do's and Don’ts in business to business collections.  Many of the Don’ts presented here are recommendations rather than regulations or state or federal laws:

• Don't not leave telephone messages with neighbor companies in an effort to contact a debtor.
• Don't engage in repeated calls to a debtor in an effort to harass the customer into making payment.
• Don't use obscene, profane, or abusive language.
• Never use or threaten to use violence or other criminal means to collect.  This prohibition includes any implied threat of violence. For example, a statement such as "We can play tough if that is the only we can convince you to pay your debt" could be considered an implied threat of violence.
• Avoid abusive language including religious slurs, calling the debtor a liar or a deadbeat.
• Avoid using racial or sexual epithets.
• Don’t make any false, deceptive, or misleading representation in connection with the collection of any outstanding debt.
• Do not claim an amount more than actually owed, or falsely state that an invoice or a debt has matured or that it is immediately due and payable if and when it is not.
• Never state or imply to the debtor that non payment will result in their arrest or imprisonment.
• Do not threaten to contact any third party, or take any other action that cannot legally be taken to collect an outstanding debt.
• Do not state or imply that not paying a debt is a crime, or that a debtor has committed fraud by not paying an outstanding balance due.
• Do not communicate by a format or envelope that misrepresents the nature, purpose, or urgency of the message.  
• Don’t mislead the debtor as to the legal consequences of the debtor's non-payment.
• Never send written communications that deceptively resemble legal process forms.
• Do not use any name that would falsely imply that a third party is involved in the collection action.
• Don't attempt to collect a fee or charge in addition to the debt if either (a) the charge is expressly provided for in the contract creating the debt and the charge is not prohibited by state law, or (b) the contract is silent but the charge is otherwise expressly permitted by state law.
• Don’t deposit a postdated check prior to stated negotiation date.

© 2011.  Michael C. Dennis.  All Rights Reserved.  Michael is the author of "Credit and Collection Handbook."