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The Debt Collector Issue

Simon Dewsberry

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I seem to be under fire of late for recommending the use of a debt collection agency ..

A few thoughts...

Consider any "professional" organisation ..banks, ccs, water, gas, electricity, phone companies, newspapers(adverts) to name but a few

These guys are running big companies in an ethical legal and moral(hmm) way ...so we should consider their business models

Without exception they will all use a debt collection department or agency to try to negotiate settlements and payment terms LONG before the use of summons to court and legal proceedings ...yes they will all threaten legal action but only as a very last resort ....

So why is there such resistance to the use of such ? Perhaps we should rename them "Debt Negotiators" and then we will all be more comfortable with the idea ?

Why would a one man band (as most of us are) not take on board a more more efficient quicker easier and less stressful system ?.....(not in fact a different system...but a fundamental step that is missed out from most LL and LA in debt management..)

Why would you want to remove all negotiatons and go straight to court ?

Why would you want to make a situation with a T who cant AFFORD to pay worse by entering into a long term solution (approx 2-3 months) and thereby incresing their debt to completely impossible levels for them ?

Debt Collectors have a very "nasty" image ...which works very much in our favour physcologically...the reality is very much different: they basically just negotiate/force a settlemant where possible and if they fail THEN they will take the matter to court on your behalf .......

Courts are very busy and from oct 07 onwards are going to get much busier sorting out all of the TDS disagreements ...so this just makes it more un desirable to go straight to court ......

I get accused of recommending DC at every available opportunity(when sit calls for it ) ...Yep guilty as charged

Q is why is everyone else missing this step out..........

DC is not a stand alone part of system but an integral part of a well oiled machine: which means proper referening (explained in detail else where) along with financial deterrents for transgressing contract terms (internationally accepted and used by ALL successful companies) along with clearly laid done procedure and systems .............Used correctly ...you wont need to go to court...In 15 years i have never taken a T to court ....In 20 years never taken a customer to court .....now this is many thousands of customers and many 100's of tenants ........

If some one can show me why i shouldn't be using one ....i'm all ears and waiting to be corrected ......

If you do not ref properly ...do not do inventories ....do not communicate with T ....are not prepared to spend a little extra time sorting problems....and think going to court is the first and last answer ......then you are in for a rough and stressful ride as a LL.....(IMO)!

Is this gospel ? Nope just sense, logic and an observation of how successful businesses run !!!!!!!!!!!!!!!!!

You can of course continue as you are .....but if you do what you have always done then you will get what you have always had ................!!!!!!!!!!!!!!

Is that what you want ?


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Effective communications resolve many problems. However, there are times when the other party just doesn't get it or chooses not to, falling back on smoke and mirror excuses, non-communication, head in the sand etc. Let them and they'll draw you into their problem. When negotiation has been exhausted you won't be doing them or yourself any favours allowing things to slide. The use of DCs is a tool to be used subject to the scenario. DCs can be very effective and allow you to say to the other party that you have done all you can to resolve the issue and have now passed it to them to handle. If they then wish to try and drag it out further you advise them that it's now out of your hands and they have to deal with the DC to put things right. If necessary, explain that you wish for a good relationship with your tenants however you are not responsible for their circumstances and you have the right to be paid the rent and pass the matter to your DC if not, who reserves the right to charge the tenant for their services. For some defaulters, this can be very persuasive but perhaps not in all cases. Make it part of your debt remedy strategy but not without thought before use.

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Spot on Gpel

But with a little thought applied, DC can also be used (the threat is generally enough) to sort out "vacation of prop issues" which tend to be present when "money needs to be collected" by negotiating "vacation of prop" as part of the deal ........thus killing several birds with one stone ....so use(or threat of use of !!) of DC is integrated at a fairly early stage of "problem solving" ....when necessary !!!

which in reality is not very often at all if refs etc are done properly ..............

In reality this is a tiny percentage, but has become distorted in some RL members minds due to the high level of problems posted on this forum of "desperate problems" where no debt management has been applied !!!!


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I have to say Simon that DC are/can and will be used when it is necessary.

GPEL has it spot on as you suggest, with 'effective communication'! This 'should' and 'needs' to be the frontrunner in all negotiations rather than the 'appoint a DC, and I recommend "Thorn**** etc etc, ask for ***** or ****" that we so often read here!! It makes it sound as though you're on commission for god's sake!!!!!!!!!!!!!!

"Consider any "professional" organisation ..banks, ccs, water, gas, electricity, phone companies, newspapers(adverts) to name but a few"

I agree, but these are LARGE businesses. if you look at their stats it is cheaper for them to employ a DC who works 'occasionally' than someone who works 'full time' recovering debts. Many businesses allocate over 4% of their business forecasts to 'loss' so it is financially viable to 'occasionally' employ a DC to do the work that employing someone would cost in excess of 30k/annum. It is really dependant on your turnover and your net profits. Hence if you are a one man band, with some small negotiation, some effective communication you would get the same, or similar results if you just communicated more effectively.

"DC can also be used (the threat is generally enough) to sort out "

My worry with this is that it is the threats "that are generally enough" that can cause the Tenant much harm and cost and all you've done is 'SOLD' this on without a 'by-your-leave'!

Anybody, and I mean anybody, can't face the predicament of a DC calling at their door and 'pinching' a DVD that they paid £200 for and valuing it at £50, thus reducing their arrears by ZERO and making it twice as hard to get their life sorted, this is why they 'conform' once it's 'threatened'.

And likewise nobody wants a CCJ against their name that will go against their credit score in the future, so either way the 'threat' as you name it is as effective as each other. Now if you threaten court action BEFORE you threaten DC then i'll give you an inch (or so) here because this is the 'normal' way to proceed, but at least you're not stealing off them.

But if you just threaten DC then i'm sorry but I feel that this is no less than 'bully boy' tactics (because as you say they have a bad reputation, which is 'their doing') and the persons debt is multiplied just by the fact that a DC has been involved (this being because they have either no sense of value or no sense of pride, or both, maybe)

I'll leave you with this thought. . . .. . .

A man's home is his castle, unless a DC comes along and values it as a Caravan!!!

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Way, way off the mark ...like on another planet ...

DC costs you nothing ...no collect no fee ...turnover irrelevant ...size of biz irrelevant.... any costs passed to T ..

Finacially viable ?????????? cost =£zero ...that is pretty viable to me !!!!

Point missed ....It is not only acceptable to use a debt collection service but is the norm and YES they are Very Large businesses ...i wonder if the fact that they have debt management made sure of this ? as opposed to going bankcrupt ?

Of course comms are priority (think you will find i type that more often than DC) but we are not talking about people who will comm here !

Recommend on basis of my and aquaintances experience of company .....legal ethical and professional...

(nope not on commission)

As for the DVD and the caravan ...conform etc ....YOU HAVE FINALLY GOT THE POINT !!!!

LL dont appreciate their rent being devalued from £500-£1000pcm down to ZERO................(or far more...)

If you are happy to let them steal the food from your table that is of course your perogative ..!!!! personally i am not !

Nothing is "SOLD ON" ...think you need to do some research into how DC actually operates!

Gareth as much as i wouldn't wish a T like this on anyone ....you really need to have a few of these and then have the conversation again ......i think we might see a slightly different Gareth !!!!!!!!!!!!

And once more i will repeat .....avoidance of court (plus associated time, cost and stress)......fast management of problem .....damage limitation for all parties .....

Read this forum again and realise that not all T are "model".............and drastic action is sometimes required....

A DC will collect the debt .....a court will throw the T onto the street.....forcibly if neccessary.......



PS I think you will find that physcologically "the threats " are NOT as effective as each other and certainly do not acheive equal results....NOR in a comparable time frame .....Hopefully you will not need to find out !

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havin been i business in some form for about 14 years, i have had experience with DC, not me employing them though!

i had a retail unit in a very large north east shopping centre, if i was a day late with the rent the threat of DC was implemented.

phoned the managment co and told them i would have a cheque to them end of working day once, phone call from my employee at 2pm telling me a DC was in the shop and wasnt leaving till he got paid, very effective as it happens! ranted and raved, went down to managment office and got removed by security.

not a very nice situation to be in, but as said, it solved the immediate problem of my rent being late and ensured future payments were on time. at the same time i had a place in the city centre, the LL there was very relaxed and he got his rent late every time, 9k a quarter usually three months late!

if someone owes you money its your choice of how its collected, if you owe them money, its thier chioce how they get it, i am in favour of the DC, but only after communications have gone pear shaped!


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Out of interest Russ

Which of the 2 above LLs do you have the most repect for ?

and which, in your opinion, was running their business in the most efficient, profitable, moral and ethical way ?


i was at both ends of the stick, the DC one was a twat, but wasnt there to be taken for a ride, the other was there for the taking!

but as for efficiency etc the DC one won hands down,


they were a bunch of w****rs


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