another debt collection secret

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another debt collection secret

another debt collection secret?Many finance providers use this little debt collection “secret” when chasing slow payers to encourage them to pay. (Works really well for “old” debts as well.)

When you apply for finance, whether it be for your business, a mortgage, car … chances are pretty high that the financier will check you out with a Credit Bureau. They can then look at your credit history – including loan defaults, applications for credit, court judgments and serious credit infringements – to give them an idea of your ability to repay.
 
Veda Advantage is the largest credit bureau in Australia and New Zealand. It provides credit reporting, credit scoring, and marketing analytics services. They also allow credit providers to “blacklist” clients who have overdue accounts that are at least 60 days past due. These are noted on the public record along with records of lawsuit judgements and bankruptcies.
 

Although you may not often want to use them to “check out” a new client before doing any work for them you most certainly could use them as a genuine “threat” on rare occasions to encourage account payments where the cost to litigate would be prohibitive. It’s an invaluable extra step. We’ve used this “tactic” very successfully for some time now and accounts have been paid as a result simply by sending an email or letter with wording like this …

 
We refer to the above outstanding balance and note that, despite numerous requests for payment, this matter remains outstanding.
 
We are now left with no alternative other than to advise you that unless we receive payment for the full balance of this account on or before 2.00pm of Thursday, 04 August 2011 we will be listing you as a default account with Veda Advantage.
 
For your information, a listed default account on your credit file will adversely affect your ability to obtain finance or credit from most sources for a period of up to five (5) years.
 
If you wish to prevent this, please contact the undersigned as a matter of urgency or settle your account before the above date.

At the time of this post, the cost to join Veda Advantage is a one-off $195 membership fee and an ongoing monthly subscription of about AU$42.
 
Again, just as in my last post How to collect old debts, this should only be done after many other attempts to collect have been made. Because if you do have a good system in place and always do what you say you’ll do, the debtor will believe you. But if you send an email or letter with this wording “out of the blue”, they simply won’t – believe you!
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And, in case you’re thinking “What a waste of time” – read this.
 
In June 2006, we listed a debtor on Veda Advantage as a slow payer.
He applied for a business loan in late 2010.
The bank he had applied to saw the default notice.
“Sorry, we can’t finance your project unless that default’s gone”.
We were paid, in full … WITH interest.
Then, the bank funded his project … 🙂

 

By | 2017-07-13T08:51:41+00:00 July 22nd, 2011|techniques|1 Comment

About the Author:

Have you ever wondered why a client does business with you and then ignores your invoice like they had no intention of paying it in the first place or they treat you like their own personal line of credit, leaving YOU dangling, waiting months for their payment? Unfortunately this situation is all too common and can even be puzzling for the most experienced business owner. If you’ve ever had to handle outstanding accounts or you are just so over non-payers, then we can help. Real-world skills, solutions, tips & strategies to get more accounts paid on time, and, most importantly, how to maintain customer goodwill while keeping YOUR cash flow in the positive. You will find the blog posts helpful but to get real results, contact us by using any of the forms on this site, by email or by phone. I’ve been involved in the management of accounts for over 30 years, heard every excuse in the book, can spot a non-payer at 20 paces. Finance Companies in the 70s (systematic, tough), professional firms in the 80s (no systems, too gentle) and, since then, just about every other sort of business you can think of. I’ve written books on the topic, spoken all over the place about it and the blog in this website is my way of “giving back”. I hope you find it helpful.

One Comment

  1. michael todd August 25, 2011 at 12:42 am - Reply

    Hi, To answer your question … “Is there anything like Veda in the USA?”, I’ don’t think so.

    To quote form this site – http://www.failedcreditscore.com.au/what-is-my-credit-score
    In the States there are country wide credit reporting agencies which generate a score based on your credit history. The most commonly used system is known as the FICO score. A FICO score is between 300 and 850, the higher the score the better. A low credit score will almost certainly result in you being unable to borrow money, or to be only able to access money through expensive specialist lenders.

    This may also be useful to you … http://en.wikipedia.org/wiki/Credit_score_(United_States)

    But, bottom line, I don’t think so. If anyone else knows, please add your post here.

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