Top 5 Tips on How to Collect Debts by Phone

Top 5 Tips on How to Collect Debts by Phone

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Hi, my name is Adam Stewart, Debt Collection Expert and owner of Debt Recoveries Australia.

For most people, picking up the phone to call a customer and ask them for money is not easy. In fact, in a lot of credit departments, the people are over worked and under staffed, so collection calls are placed dead last or fall off the “to-do list” altogether.

Why? Reasons vary. But basically, the truth is that making collection calls takes most people out of their comfort zone. They don’t feel confident with the process. There is also the fear that you will scare off your customer. In fact, the opposite is true. Most customers will respect you for having sound accounts receivable practices, if you call them on a regular basis, about their accounts.

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    So if debt collection calls are part of your job responsibilities, here’s some good news. You can become more comfortable and more successful by following some of these tips:

    1. Be Prepared.

    Before you pick up the phone, it’s critical that you have all the specifics of the debt you’re calling about. Having the facts in front of you keeps you in control. You don’t want the conversation to get derailed by a question you can’t answer.

    Many debtors know how to use this to their advantage. Suddenly they can’t discuss payment on their account without details you don’t have and they don’t “have in front of them” either. So, the call is over.

    At minimum, be sure to have the following in front of you before you make the call:

    • exact amount owed
    • terms of sale
    • products/services purchased
    • payment due date
    • other open invoices, even those not yet past due

    It’s also helpful to brief yourself on the customer’s payment record with your company, as well as any other payment history you may have available to you. Do they usually pay on time? Are payments getting slower and slower? Is past-due payment uncharacteristic of this customer?
    Before making your next collection call, take time to compile a list of common debtor excuses, matching them with effective rebuttals. Write them down on file cards or include them in your computer scripting. Group them by category and keep them handy. Exchange ideas with others in your department. Then, when the debtor tries to end the call by offering an excuse, you can take control by countering with a well-thought out reply and returning to the purpose of your call — collecting the debt.

    2. Be Friendly and Persistent.

    This sounds obvious, but each phone call should begin by welcoming the customer to your business or your department and by you introducing yourself. Our philosophy at Debt Recoveries Australia is to be friendly, yet persistent. We will always be cheerful, but we will ring each week until we have payment. The debtors get to know this pattern and know we will not give up until we get payment. This is all done in a friendly manner.

    Your mental state has a strong impact both on how you handle the debtor and how they respond to you. Treat each call as if it was your first call of a very good day. Put a smile on your face. If you were irritated on the previous call, take a few minutes to calm yourself and start afresh. The debtor will respond to your tone. Your upbeat mood will be contagious and you are likely to get a more positive response from the debtor.

    3. Practice Active Listening.

    Focus your attention on the caller. When your customers call up, stop what you are doing and focus your attention on them. Listen actively to the caller, take notes and repeat their query back to them so you’re both clear about what they are asking. This will help you to give the best service possible to your caller.

    Don’t interrupt a customer while they are explaining or even complaining. It can be difficult to do this, but make sure your whole team is trained to listen to the entire issue, no matter how long it takes. Not listening to the whole story is a great way to make your callers feel ignored and unimportant to you.

    4. Ask open-ended questions.

    Try to get the debtor to give you as much information as possible. For instance, bank information is critical, yet many debtors may not want to share it. Instead of coming straight out and asking, “Where is your account?” Try “Will you be sending a check or a money order?” He will usually say “a check.” You respond, “That’s fine. So we don’t miss it, what bank will it be drawn on?”

    5. ABC’s (Always Be Closing!)

    Lastly, my favourite and the reason why you made the call in the first place, don’t forget your ABC’s. Always be closing the deal. A call that doesn’t result in a commitment from the debtor is a wasted call. If you can’t get them to commit to payment in full, get a promise of something — a partial payment or a call back with a payment date. Make sure you control the timing. Don’t ask, “When can you get back to me on this?” Rather, ask “Will you be calling me by Wednesday?”

    Don’t hang up the phone without summarizing the results of the call: their commitment; your expectations; and, the consequences if your expectations are not met. Emphasize the urgency of the matter. It’s easy for the customer to forget your call as soon as he puts down the receiver, especially if they don’t think you were really concerned about the outcome.

    Stress the importance that the debtor call you back on the date they promise payment — to let you know the check has been sent. If they fail to call, the payment likely didn’t happen. You won’t waste time waiting for a check that was never mailed.

    And finally, if the debtor doesn’t follow through on their commitment, make sure you follow through on the consequences. If you don’t, they will never take you seriously.


    Debt Recoveries Australia is the expert at recovering your outstanding debts without the drama. We are also providing free templates for you to use on your debt collection. For more details, email us at or call 1300 799 511. Tell us your problems on Skype at “debtrecoveries”.

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    Adam Stewart - Debt Collection Expert
    About the Author

    In 2002, Adam Stewart established Debt Recoveries Australia Pty Ltd, a debt collection agency specialising in the insurance claims industry.

    Adam has worked in the fields of motor vehicle insurance and debt recovery for over 12 years, working with some of the largest insurance and debt recovery companies in Australia. Read more

    One Comment on “Top 5 Tips on How to Collect Debts by Phone

    1. I think it makes sense that you would want to be friendly and persistent when collecting taxes. Otherwise you run the risk of coming off like a brute! You’re not trying to muscle them or anything, after all.

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