Debtor Rights – What you need to know before you start chasing customers

Debtor Rights: What you need to know before you start chasing customers!

Chasing outstanding invoices and late payments of commercial debts is not always easy or as straightforward as sending an email or making a follow-up phone call.

There are guidelines and legislations that must be adhered to, and debtors do have certain rights protecting them from unscrupulous collection methods.

These guidelines and regulations apply to professional debt collection agencies (like Direct Route Ltd) and businesses collecting debts in-house.

The most important things to remember before debt collection include:

Check your information

Before debt collection commences, ensure all the information and details you have been correct. Make sure to check, and then check again that the invoice remains outstanding, and payment is yet to be made. Also check due dates, how long the invoice has been outstanding, and if there are any notes on file or further information that you should be aware of.

Trust us, having all the facts makes for an easier phone call.

You must also check that all email addresses are correct and that you are sending these to the right person.

Hours and place of contact

When contacting debtors in the UK, you should not call at “unreasonable” hours.

Currently, in the UK, there is no set or prescribed times when you should call; however, it is generally considered unreasonable to call debtors before 8 am and after 9 pm.

Note: These timings can also be applied to face-to-face contact if you carry out doorstep collections.

You can contact a debtor at their place of work during their working hours; however, the debtor does have the right to request you only make contact at certain times, places, and in some instances, methods (make sure to check out our post on email vs. phone calls).

All reasonable requests by the debtor regarding contact should be respected and only be changed if no contact or willingness to pay has been received.

Debtor privacy

Before chasing debt, it is critical that you ensure that the person you are speaking to is indeed the debtor.

You must carry out this level of confirmation every time you make contact, as you must not pass on or release any information about the debt to the wrong person.

A person’s financial information, including their debts, is their personal information, and it is your responsibility to keep it this way.

Note: If you do visit a debtor at their place of work, extra care should be taken regarding privacy, i.e., no messages should be left stating that you are chasing a debt or that you are calling from a debt collection agency, and the name of the agency.

Frequency of contact

Debtors should not receive excessive communication from a debt recovery agency. In fact, contact is recommended to be limited to one call per week.

Contact should never be more than necessary to avoid contact being considered harassment.

Using the right language and tone, you should also be prepared to respond calmly. To

excuses or delay tactics.

Due to the restrictions in this area, debts are often referred to third-party debt collectors who use their knowledge and expertise to collect all outstanding debts successfully and compliantly on your behalf.

Record keeping

Record keeping is crucial for successful collections.

You must record all contact attempts and all communication forms in detail, including date, time, what information was discussed, who you spoke to, etc.

Take time to listen. Be friendly and diplomatic, be professional, and remain in control.

It is also recommended that you have all documents and information relating to the customer, paperwork, etc., readily available if they request to see them.

All of this information is vital if the debt is pursued in court.

Avoid using jargon

You should avoid using jargon and technical language in any communications you may have with debtors, as you are not allowed by law:

  • To purposely confuse debtors
  • You must not claim that you have legal powers, and
  • You must not pressure a debtor to force payment.

Work with professional debt collection services

Working with a professional debt recovery agency like Direct Route ensures you have access to robust collection processes and procedures, years of industry knowledge and experience, and expertise in all aspects of collections.

Outsourcing commercial debt to a professional debt collector is the most effective and coherent way to collect outstanding debts quickly.

They have the tools, knowledge, and expertise to ensure late payments are pursued compliantly.

What you need to remember before chasing debt

Not everyone likes collecting outstanding invoices or chasing late payments; however, it is an essential part of your finance function in order for you to maintain a healthy business cash flow.

Every business will have its own unique credit control processes and procedures; however, every business must abide by collection guidelines to ensure its collection practices are compliant at all times.

With Direct Route…

…save time, improve your cash flow, and reduce levels of bad debt.

Call us today at 0330 229 1991 or email with your requirements.