International Debt Recovery: Communication Techniques

The previous two posts about communication in international debt recovery were about the context and means of communication available to the collector. This post will be about communication technics in international debt recovery.

We will describe four techniques that are without doubt essential for communication in international debt recovery.

Tight collections process

international debt recovery techniques processIn first instance, it is of the utmost importance that you set the framework when you are collecting a debt internationally. Timelines, frequent and consistent following up by email and telephone, and if and when necessary, regular mail, means you set the rules of the game. You should almost show empathy, be professional, take into account the debtor’s situation and the circumstances that may affect speed and outcome, but at the end of the day your aim is to collect as much as possible, as fast as possible. Give debtor reasonable time between the follow ups to comply with what you request or agree, but make sure there are clear deadlines and strictly follow up on your own deadlines.

Use of leverage

international debt recovery leverageWhen communicating to collect a debt internationally, you must be aware of the leverage you have – or do not have. This determines whether you can demand full payment, should look for a settlement, can go legal or not, may consider accepting return of products or goods, and if there is a reasonable chance to reach an agreement on a payment plan. Leverage can be the existence of a commercial relationship the debtor still has an interest in to maintain or re-establish, the realistic option of enforcing payment legally if no payment is done or a payment agreement is reached amicably, or the reputation debtor wants to safeguard. Understanding the leverage, you have and using it in your communication is in our opinion is an absolutely essential tool for successful international debt recovery.

Negotiation

3d bussines white and red humans make a handshake

When the situation requires or provides for the opportunity, be prepared to negotiate with debtor during your communication. If the situation requires so, or if debtor is reasonably looking for a settlement or a payment plan, be open to negotiate; be reasonable, be fair, but always keep in mind your client’s interest in collecting as much as possible, as fast as possible. Each situation is different in that respect, and the circumstances dictate what will be as much as possible and what fast is. Negotiation is an integral part of international debt recovery, and particularly if substantial amounts are involved that make a serious economic difference for debtor and client.

Mediation

international debt recovery techniques mediationIf the reason of an outstanding international debt is a dispute, international debt recovery turns into true mediation. If the situation requires so, and as often legal proceedings is a rather expensive, time-consuming and therefore unattractive alternative, in circumstances with a dispute involved, in reality the only serious option to recover part of the debt is mediation. Obviously the aim is to recover as much as possible, as fast as possible: as you will see, that should at all circumstances be the starting point. When you mediate between debtor and your client you will have to accept that the outcome will end up somewhere in the middle. You should always look for the best solution possible for your client, taking at the same time into account debtor’s (reasonable) arguments, situation, and circumstances.

In this post we discussed four techniques for international debt recovery: a tight collection process, use of leverage, negotiation and mediation.

If you are interested in learning more on the subject of communication in international debt recovery, or international debt recovery in general, or specifically debt collection in Latin America & the Caribbean, please connect with Cobroamericas on Linked-In or follow us on Twitter.

To participate in the conversation about debt collection in Latin America please join the Linked-In Group Debt Collection Latin America.

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International Debt Recovery: Means Of Communication

In the previous post we discussed the importance of understanding the context for communication in international debt recovery. In this post we will mention the four basic means of communication with debtors abroad.

Regular mail

international debt collection sending letterAlthough in certain cases it is good to still send regular mail, at least if and when it might become necessary for file building in case of legal proceeding, for example, to formally have put an individual or business on notice, the letter has long lost its prominent function in international debt recovery. Often it is too slow, too unreliable and one of the less effective means of communication. Addresses are temporary, people and businesses move or even change country. We still mention it but it should not be on the top priority list.

Telephone

International Debt Collection telephoneUsing the telephone to make calls is still in our view essential for effective and successful international debt recovery. Using the phone includes landlines, cell phones, WhatsApp, and Skype (the latter three also include chat options). Although one might close a deal by email only, usually understanding the context of debtor’ situation, negotiating payment or settlement, or mediation, can only be done effectively by talking to debtor.

E-mail

international debt collection emailInternational debt recovery nowadays is hard to imagine without e-mail. A lot of actual payment arrangements and settlements are fully negotiated only by using e-mail. Most of all however, e-mail is a speedy way of formal communication which has almost in its entirety replaced regular mail, to transmit notices, supporting documentation, payment proposals and payment plans. What makes e-mail often even more reliable than regular mail is that people tend to stick to their personal e-mail addresses, also when they change home or country. Physical addresses generally tend to be more temporary than e-mail. For international debt recovery, in our opinion, it is absolutely essential to make use of e-mail as a main element of communication.

Social Media

international debt collection social mediaSocial Media have rapidly become very important means of communication in international debt recovery. Social Media like Facebook, Twitter, and Linked-In offer direct chat options. Also, like e-mail people tend to stick to their Social Media which makes it resistant with respect to moves or change of country. In addition, Social Media offer an important source of information about individual debtors or companies.  Social Media should definitely be part of the means of communication in international debt recovery.

In this post we discussed the four basic means of communication in international debt recovery: regular mail, telephone, e-mail and Social Media.

If you are interested in learning more on the subject of communication in international debt recovery, or international debt recovery in general, or specifically debt collection in Latin America & the Caribbean, please connect with Cobroamericas on Linked-In or follow us on Twitter.

To participate in the conversation about debt collection in Latin America please join the Linked-In Group Debt Collection Latin America.

International Debt Recovery: Context For Communication

For practicing international debt collection, communication is essential. Communication in international debt recovery will at all times be based on a certain context which may consist of a physical distance between creditor / collector and debtor, cultural differences, other languages spoken, and several time zones involved.

Distance

international debt recovery distanceWe assume that while collecting an international debt you will be confronted with a physical distance between creditor and collector on one end, and the debtor on the other (and sometimes, perhaps often, there is also a physical distance between creditor and collector, but that is for another post); the debtor is based in another country. This requires practically that you understand how to communicate abroad, which starts as simple as dialing internationally when you make a phone call (which can sometimes be a challenge because specific indications for calling cell phones or remote areas, for example), to understanding the location your debtor is in and the economic, social or even political environment.

Culture

international debt recovery cultureInternational debt recovery means you should understand the cultural differences that may exist between creditor, collector and debtor and which may affect the collection process. Cultural differences include business ethics, manners, and local rhythm of life, amongst others. In my view it is extremely important to understand culture in order to effectively collect debt internationally, to negotiate or mediate successfully, and also to properly advise your client.

Languages

international debt recovery languages.jpgFor recovering a debt internationally, it is essential to speak your languages. English might be for many the international business language but often people do not speak English, or at least not sufficiently enough, for you to be able to properly collect a debt, understand the debtor’s circumstances, negotiate or mediate. If I look at Latin America, in most of the countries you will not get very far if you do not speak Spanish, or Portuguese in Brazil.

Time zones

international debt recovery time zones 2Dealing with different time zones is an integral part of the context of international debt recovery. The difference can be a couple of hours up to an entire day. To effectively collect a debt internationally you have to be aware of the differences in time zones but also local business hours, and even take into account times people usually start to work, take a lunch break, have a siesta, as well as national and local holidays.

In order to effectively collect a debt internationally, communication is essential. In this post we discussed what I see as the four basic assumptions with respect to the context for communication in international debt recovery: The physical distance, cultural differences, another language spoken, and different time zones between creditor / collector and debtor.

If you are interested in learning more on the subject of communication in international debt recovery, or international debt recovery in general, or specifically debt collection in Latin America & the Caribbean, please connect with Cobroamericas on Linked-In or follow us on Twitter.

To participate in the conversation about debt collection in Latin America please join the Linked-In Group Debt Collection Latin America.