Einstein’s famous insight that doing the same thing over again and expecting a different result is tantamount to insanity, rings true on so many things.
Including recovering bad debt.
For decades, a one size fits all debt collection methods have been less than fair.
There’s been little focus on people, rather a collection process that identifies those struggling financially as a number on a balance sheet, a quick turnaround pay day.
Processes that add fees and excessive interest while expecting fast repayment.
Unfortunately, this blunt approach means many of those who find themselves struggling can’t pay off the original debt, instead they’re weighed down just servicing the extra amounts suddenly piled on top.
For example, as outlined in the recent September 2021 FinCap Report, typical fess of between 18 – 40% on a $2,000 debt can add 12 – 34 extra weeks to pay off the new inflated amount.
Based on a conservative $25 per week (before even getting to penalty interest) that equates to around an additional 6 months of extra pain.
Is that fair?
Of course it’s not, especially when you start to ask if that extra $25 per week means a family can’t put food on the table or pay electricity bills.
Imagine the stress and worry that piles on?
Sure, there needs to be a penalty if someone who can pay is merely avoiding their obligations, but what happens when there’s just no more money?
Some can never pay a cent back, so everyone loses.
And for companies hoping these customers might one day return to their business, after these often harassing and threatening collection tactics?
Crazy.
At DebtManagers, we reckon Einstein was right.
In any industry, methodologies need to change and evolve if we want better results.
The clue to how we do achieve better outcomes is in our name.
At DebtManagers, we don’t collect debt, we manage people out the situation they find themselves in, enabling them to pay off what they owe and become a valued customer again.
Empathy, not aggression.
Fairer, sustainable repayment plans, not excessive, immovable demands.
Success and financial certainty, not debt written off and customers lost to the business and the economy.
In fact our whole model is based on not doing things the same as others in the industry.
Our process is to buy your bad debt book for an agreed percentage, plus many clients commit to ongoing forward-flow agreements.
Once you’ve received financial certainty, we then apply the effort and expertise required and together with each customer, work out the time they need to repay the money they owe.
We even connect those customers with independent, zero-cost, financial mentors, to give them further support and expert advice.
For the companies we work with, we provide a partnership that delivers a real sea change in how most businesses have formerly regarded debt sale.
Now, brands can be confident their customers will be treated with respect and can regard debt recovery as just a normal part of the economic cycle, with no stigma attached.
By rejecting the old tactics of adding fees and excessive interest and genuinely getting to understand every customer’s personal situation, both business and customers alike can expect a different, better outcome from our debt management process.
All to create a fairer financial world where everyone can thrive.
And it doesn’t take a genius to realise that’s got to be good for individual families, communities and our economy.
