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A collections specialist contacts debtors to negotiate payment of overdue debts, often with a background in finance or sales. They must understand consumer credit reports and debt collection laws, and may escalate cases to legal action if necessary.
A collection specialist is an employee of a debt collection company who contacts debtors who have defaulted on debts or people who have failed to pay overdue bills. Specialists must first locate the debtors and then attempt to collect payment by negotiating the debts. Typically, a collections specialist is paid a base salary, but some companies pay bonuses to employees who successfully collect overdue debts.
Many collections specialists have experience in lending or banking. Some collection agencies require specialists to have college degrees in finance or economics. Other companies prefer to hire people with sales experience who are used to making proactive teleconsultation calls.
In many countries, credit account details are held by consumer credit reporting agencies and creditors obtain reports from these agencies before extending new credit to consumers. A collections specialist should have a good understanding of consumer credit reports. Many borrowers agree to settle bad debts when they become aware of the damage done by the debt to their credit report.
A department manager assigns several overdue accounts to each collections specialist, who attempts to contact the debtor using the contact information provided by the creditor. In many cases, the telephone numbers or addresses provided are inaccurate, but in some countries laws allow collection agencies to contact the debtor’s relatives to obtain the correct contact information. If collection specialists cannot locate the debtor, the agency typically escalates the matter to the creditor. In some cases, instead of helping creditors collect debts, collection agencies actually purchase debts from creditors. Experts often spend more time researching debt that has been purchased as opposed to debt that is still owned by other parties.
Many nations have laws in place that limit the ability of collection agents to pursue debtors. In some areas, a collections agent cannot contact a debtor by phone during certain hours, such as early morning or late at night. Laws also typically prevent a collections specialist from making false or misleading statements about the consequences a debtor may face for failing to settle the account. Consequently, specialists should familiarize themselves with national and regional debt collection laws, because in some countries specialists and agencies may face fines for violating these laws.
Laws in some countries allow collection agencies to take legal action against debtors who are unwilling or unable to settle their debts. A collections specialist will typically need to notify the debtor in writing of impending lawsuits and may also have to file documents with the court. In many cases, agencies can garnish the debtor’s wages or even place a lien on the debtor’s home. A lawyer usually handles the court case, but the specialist who tried to collect the overdue debt may have to appear as a witness in court.
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