Ten Things Not to Say to Debtors

© Michael C. Dennis. 2011. All Rights Reserved

There is an old expression:  “Remain quiet and others might think you are a fool.  Open your mouth and tell others what you think and they will know that you are a fool.”   From this old expression, we can derive the following corollary:  “When you are in contact with a delinquent customer, speak as if every word you say is being recorded and will either be replayed in a court of law, or will be played back to your manager. “  

Here is a list of 10 statements or comments that should not be made to a delinquent debtor: 

1. “I’m only doing my job.”
This is an apology.  As the representative of a creditor calling to inquire about the status of a past due balance, you have nothing to apologize for.  Why?  Because your company is the damaged party --- not the past due customer.
2. “I’m sorry to bother you about this matter.”
This statement minimizes the importance of your collection call.  You might want to substitute a more appropriate comment such as this:  “Thank you for taking my call.  I need your help to resolve a problem involving a balance of $xxx that has now become seriously delinquent. “
3. “If we cannot reach an agreement today relating to the past due balance, I am going to seriously consider placing your account for collection.”
The phrase: “I am going to seriously consider placing your account for collection” is not definitive.  

A better way to state your expectation for the collection call and your intention to take action if the debtor cannot make a reasonable payment proposal would be to state:  “At the end of this discussion, if we have not negotiated some type of arrangement to retire the outstanding balance acceptable to your company and mine, I will be out of options and must immediately refer your account to a third party for collection.”
4. “I am under a lot of pressure to collect this past due balance as soon as possible.  I could really use your help.”  
Any delinquent customer hearing this statement could be forgiven for assuming that they are great bargaining position.  Once the debtor is in the driver’s seat or thinks they are in control, it is difficult for the collector to regain control of collection discussions and negotiate the fastest possible debt repayment.  A better statement would be:  “As you know, tour account is seriously past due.  We need to reach agreement today about how soon this past due balance will be cleared.”

5. “That’s not my problem.”
Assume that a customer indicates that they will not pay a past due invoice because of a pricing dispute.   Telling the customer this is not your problem will not be well-received.  What should you do instead?  Agree to have someone look into the customer’s claim that they were overcharged on the invoice.  Once you have done that, ask the customer to pay the undisputed portion of the past due balance immediately and expect that they will agree to do so as a demonstration of good faith on their part.
6. “I’m frustrated by the direction this discussion is taking.”
This comment should not normally be used because (a) it is confrontational and (b) because its goal is to place the debtor on the defense.  Generally, trade creditors conduct “soft” collections.  They leave “hard” collections in which debtors are placed on the defensive to third party collection specialists.

7. “I need your help.”
This comment may also give the customer the impression that they have more bargaining power than they actually do.  A better statement would be:  “I think it is in both our best interests to find a way to work together to address this collection issue before it escalates and I lose the ability to control our company’s response.”

8. “I can’t work with _____ in your Accounts Payable group.”
It is unlikely that your account is going to be reassigned to someone else in Accounts Payable because you don’t work well with the individual assigned to your account.  In fact, the A/P Manager or Controller may consider a complaint from a vendor to be validation that their employee is doing exactly what is expected of them as a member of the Accounts Payable group. 

9. “I cannot spend all of my time working to reconcile your account.”
Customers expect their account is considered important.  If you cannot spend time working to reconcile an account, in effect you have conceded defeat and thrown in the towel.  Why?  If you want to get paid, you’re going to have to do the research and provide the requested documentation proving that the debt is owed…irrespective of the time required to do so.

10. “Let me put you on hold”
Although it is not always inappropriate to place a customer on hold, before doing so you should indicate:

How long the customer can expect to be on hold

Why you need to place them on hold, or what you intend to do while the customer is on hold.

Note:  If you expect that the customer will be on hold for more than 3 minutes, ask for the customer’s direct dial phone number and call them back after you have gathered whatever information or documentation you need.