Should you use debt collection to get back at customers? Often, when you're not paid, you feel like you want to get revenge. We get that. When a balance reached debt collection you're usually angry, and may have had a few heated discussion with your late customers. But, wait. The expectation that the Debt Collection Agency be the "bad cop" and harass your customer is exactly what gave the industry its bad reputation, and hurt the reputations of many businesses that use debt collection. It goes against reasonable behavior (yes, granted, so is not paying something you owe). Trying to find a better way is why we started TrueAccord in the first place. What's the alternative? If you're working with us, let's take a deep breath. If your customer is in our system, they'll get messages with all the legally required disclaimers, they will probably get called, they might get reported. Their life is not a picnic. Let's take a minute to think about your goals. First, are you sure you did what you could to retain this customer, and get paid without escalation? Are you sure none of their claims has any merit? Are you willing to lose the customer over a disagreement? Some customers are just irresponsible people. I'll give you that. But many, more than you think, have a reason that they feel is legitimate for not paying. Losing them means losing their future business, and maybe other customers they could bring with them. Understanding them and settling if needed can be more beneficial. This is when our dispute resolution process kicks in. The way we see it, we're more than just the "bad cop". We're your customer retention department, and we want to act in your best interest. Many times your best interest is very different than what you think it is when you submit that debt to us. Should you use debt collection to get back at customers? Definitely not. Using us as your retention department, you should allow yourself to think long term and support your growth whenever possible. Beyond recovering money you're owed, this is the long term added value that TrueAccord can give you.

I'd like to share a disturbing phenomenon we've observed in our data, one that probably impacts many of you who provide services to online businesses. When a new customer is entered into our system, we crawl for additional information about them on the web as well as look for them elsewhere in our system. As we grow and see more companies and the people who owe them money, we start to see chains of debts that are linked to one another. Deeper linking checks revealed that the individuals connected with these debts owned multiple websites, some of them dysfunctional, and often with web hits that indicated some kind of foul play. As we dug deeper, the picture cleared. There is a large number of individuals, operating online, starting and closing businesses in a highly irresponsible manner bordering on fraud. These individuals, by and large (as far as we can see) unrelated to one another, tend to serially open businesses with hardly defensible business models, contract the majority of the work for them to third parties, charge unsuspecting consumers large amount of money, and move on to the next business. We are unable to determine, at this time, whether this is pure fraudulent behavior or just extreme irresponsibility, but the pattern exists. We see it across fashion, insurance, financial planning and several other services. As a business owner, you should be aware of this pattern, especially if you are providing services to online businesses. Design, eCommerce, Hosting and other related services are especially vulnerable since they are key in starting a new online property. TrueAccord customers can ask for access to our Data Furnishing program, that can provide data to help identify these individuals before they are able to do business with you. We recommend that, before you take on new customers for large projects, you run a manual search of their web history, previous businesses, and other owned domains. You may (or may not) be surprised to discover a few of those in your own customer roster. [contextly_auto_sidebar id="e2zVfcB5o56U7AjMGckBxyh1Rn6FEUqh"]

We all want to be paid by our customers as early as possible. While getting invoices out as soon as a job is done and following up to assure payments are two great tips, there actually several design cues that you can include to improve the way your invoice is handled. We're put together a list of the top 3 invoice design tips that get you paid faster. Why Do I Need Invoice Design Tips? Nobody likes paying. We all love buying, but the payment part is the hard part. Because of that, we use any excuse we can to put off, delay or just forget about bills. Correct invoice design and wording leads to lower cognitive load, and to lower objection to paying your bill. After all, you want to be at the top of the pile, where bills get paid. 3 Invoice Design Tips That Get You Paid Faster The following tips are a result of TrueAccord's research into communication language that works when talking to late paying customers. Much like handling excuses, you need to know what to say, to whom, and when. Invoice Design Tip #1: State The Facts The easiest way to undermine the payment process is to dispute the facts: when was a job done, what were the payment terms, what was delivered. It's in your best interest to define the facts and set the stage for the demand for payment. That way, you reinforce the value you provided to your customer, and help them agree with the fact that you need to pay. Include a clear statement of work and the breakdown of all related charges, note when the job was delivered, and refer to your signed contract. Invoice Design Tip #2: Define The Path To Payment Arguing about method of payment is the easiest way to avoid paying. From "the check is in the mail" to "I only pay via bank transfer", customers will have multiple excuses to why they can't pay right here and now. Providing an easy way to pay (via an online form) and a variety of ways to pay (wire transfer, mailed check and so on) will reduce friction and increase your collection rate. Your job is to be able to reply to every "But I prefer..." with a "No problem, here's how you do it. Please pay right now." Invoice Design Tip #3: Instill A Sense Of Urgency It's important to make it clear that you expect action from your customer within a limited time frame. Lack of deadlines and generally laid back language will get your invoice tossed to the end of the line. Use bold colors, explain that the customer is expected to act as soon as possible, and add a concrete time frame ("Please pay or contact us to make a payment within the next seven (7) days, by [Date].") Make sure you are polite but assert the need to act now and make a payment. Add a due date and use contracting colors to highlight important next steps. Bottom Line You want to get paid for work you already did. Too often, business owners neglect this important function only to find that they did all the work but are not getting anything in return for their efforts. Other business owners aren't scammers - like you, they're trying to juggle cash flow and the incoming bills. You need to make sure that you are properly set up to be on top of their mind when they look at that pile.    

[contextly_auto_sidebar id="2sE7zdI2kWXd88tE4oR7ogZcD0iUppTB"] What can debt collection do for your business? Many business owners who run into difficulties in getting paid ask themselves this question. Is debt collection right for me? What can it do to my business? Should I do it myself or outsource? What Can Debt Collection Do For You? At TrueAccord, we believe that debt collection is a natural part of the value chain of business. While many think of debt collectors as "the bad guys who harass people", we strive to redefine what Debt Collection 2.0 can be. At its best, debt collection augments your internal efforts to get paid, adding a qualified third party who not only has access to tools you don't have, but also has more negotiation experience. Specifically, more experience negotiating with people who are not able, or not willing, to pay you. A good debt collector can help you with proactive loss management, resulting in a significant increase in the money you get paid. Since it's money you already worked for, it goes right to your bottom line. What can be better? Is Debt Collection Right For You? Do you have customers who owe you money? Do you feel frustrated or unhappy with the way you handle them? Do you have customers who just seem bent on not paying you? Are there customers you almost lost hope with? If you answered yes to one or more of these questions, you need help recovering money you're owed. Debt collection is a cheaper alternative to keeping a lawyer on staff or suing customers, especially if the relationship has become adversarial. One of the things we learned at TrueAccord is the debt collection has a strong relationship component. When defaulted customers pay through us, they often do so because they feel that they're being heard for the first time since their dispute with our merchants started. It happens that a customer has a bad customer care experience, some billing error, a misunderstanding about an invoice, and suddenly they're 90 days behind. Sure, a lot of late customers are just making excuses - but that's why we're there, to deal with them. You need to choose the right one, but using a third party service will get you far in collecting in those unfortunate cases, and when done correctly, will also help salvage that lost relationship. Should I Do It Myself Or Outsource? We support, encourage even, that you talk to your customers before sending them to us. In fact, a structured process is key to not only getting paid yourself, but also increasing the chances that we can recover for you. If you can afford it, assign an employee to make phone calls to late payers (and don't forget to teach them how to handle excuses). Then, after the first few weeks (we recommend 15-30 days past due), you can ship them over and let us take care of them. A good debt collector will recover money; a great collector will recover money, plus some of your old customers, and help you grow your business. Think about us as your SWAT team, coming in when previous effort have failed. And, best of all, you only pay us when we collect.  

In business, cash flow is king, and one of the worst things that can happen is not getting paid for services or products you already delivered (we wrote about that here ). What do you do when this happens to you? How do you get paid? You can read why talking to your defaulted customers is important, but maybe you're already convinced. Collecting money you're owed is a relationship rebuilding exercise, best approached in a structured way, and sometimes is best left to expert relationship managers. When you do talk to your customers, though, you often run into excuses. They won't blatantly say that they won't pay you - but they have 101 reasons for not doing so now. Maybe later. Who knows? The Top Excuses Customers Make This is why we wrote the business owners' manual to the top 4 excuses debtors make. TrueAccord's expert system communicates with customers via multiple channels, and obviously we deal with excuses. This eBook will help you answer these questions and others: Some people genuinely can't pay - how do you know how's just making excuses? How do you deal with excuses in real time without getting too emotional or personal? What are the most common excuses I may hear from my customers? If you're planning to talk to your customers and want to recover more, this free eBook is for you.

You made the big step and decided to work with TrueAccord. Congratulations! You realized that you need a collection company. You want to reduce churn through proactive loss management. You're ready to go. What happens now? Notifying your debtors Before we start working, you should notify your customers that they'll be hearing from us. Read more about what to do before sending customers to TrueAccord. Submitting debts for recovery Sending debts to TrueAccord is easier than you'd think. If you're handy with code, our API v1 is available for use. If not, just send us a CSV or XLSX file and we'll load it into our system. Setting a collection strategy TrueAccord is an automated service. You don't need to be an expert to use it - our experts and software do that for you. There are, however, some parameters you may want to control: What is the maximum discount rate you'd accept to consider the debt settled? We'll make recommendations based on the debt's age, but you can dictate what number we'll use. What is the longest payment plan you'll accept? We always recommend allowing longer payment plans to provide flexibility to your customers, but some businesses prefer to recover fast or not recover at all. How should we treat disputes? We always recommend allowing debtors to present their service or product complaints, if those caused the default. Going through the dispute process might tell you something new about your business, and increases the chances of retention, not only recovery. Using our Creditor Dashboard to follow up TrueAccord's Creditor Dashboard lets you track your portfolio distribution, see how much we recovered for you, and overall account activity. It also lets your operations team respond to incoming communication from debtors, such as requests for detail debt information. Starting to Recover with TrueAccord The Creditor Dashboard also lets you track the expected amount to be remitted in the next cycle. Watch the payments made by debtors who've gone through the industry's most fair and personalized recovery process, and see them going directly to your bottom line. We're happy to help!  

You decided to invest in loss recovery. How do you make the best of it? Structured Escalation The first step is making sure you handle debt correctly even before sending them to a 3rd party. Here are several things to think about and do. How long should you wait? Some customers "self-heal", meaning pay without being pursued. Those who do pay within 30 days of the due date. Track and validate that you're letting the right amount of time pass. Sending customers to collections too late reduces recovery effectiveness - especially if these customers owe money to more than just your company. You need to be top of mind for them to make sure you get paid, and the earlier you start the better. Why did the customer default? Form an opinion on why the customer defaulted. The reason for default is important so you can both invest your efforts and guide your collection company. Does this seem like a fraudulent transaction or a case of identity theft? Expect to not recover anything; sending this debt to collections won't help. Conversely, is this a well known customer who suddenly isn't paying? They should get an extremely careful treatment, both internally and from your collections partner. TrueAccord uses a debtor classification engine that assigns likely default reasons to different debtors, so even if you can't form your own opinion, you can rely on us. Give ample notice and time Start with giving your customer a few days' grace period. They might just be a bit late to handle bills or delayed due to a temporary issue. 3-7 business days are the standard. The grace period and follow up reminders have two goals: first, improve your internal recovery rate. Second, start the escalation process leading to 3rd party collections. Once the grace period has passed, send a reminder. Use your standard mode of communication with the customer (email, text, letter) to do so. If the amount is large enough, follow up with a phone call 3-5 days later. Present the balance owed and make a clear demand for settlement. TrueAccord rigorously tests and optimizes demand notice sending times and content, and gets great results with only emails. You, however, only have one or two shots and should reinforce the message with a follow up. Repeat this step 1-3 times until the "self-heal" period ends. Some customers will deflect with general excuses or vague promises for future payments. Be firm with both types of evasive behavior: remind the customer of the contract they signed, and demand full payment by a set date. Don't let this drag on and don't be dragged into negotiations. These are the realm of experienced negotiators, like the ones we employ in our operations team. Pre-placement and placement notices Once the self-heal period ends, start the escalation process. It starts with a pre-placement notice, a last effort to get your customer's attention by signaling how far you're willing to go to get paid. State that you were unable to get paid by them, and that their lack of communication leaves you no other choice than sending them to collections. State a time frame after which you'll send them to collections; 7 days is a common number. Several of our customers recover a large percentage of their unpaid debts at this point, since no one likes being sent to collections. Once 7 days have passed, send your customer a placement notice. Staying professional through the process is important for recovering your loss and the customer's long term business. Don't be vindictive, simply state that they are now placed in collections, and let them know who the collection company is. Some of the most effective collection notices explain that the matter is now out of our customer's hands. From that point and on, you should let your collection partner handle the process for you. Bottom line Sending customers to collections should be a well designed experience. You will recover money and lost relationships, starting with implementing a structured process for escalating communication with defaulted customers. TrueAccord's escalated interaction process allows you to seamlessly move from internal follow up to external collections, quickly improving your recovery.  

One day, you may receive a letter or call trying to collect money that you don't owe. There are many reasons for wrong collection attempts. You may have a common name shared by many people, or live at an address where a debtor used to live. You may be a victim of identity fraud. You may also indeed owe something you weren't aware of. Either way, it can hurt you if you don't deal with it. Disputing with TrueAccord If you don't believe the owe this debt, dispute it immediately. With TrueAccord, you can click the "Dispute" link in emails or on landing pages, and tell us your story. We don't want to chase the wrong person, either. Use our low friction process to file a dispute, and we'll pause collection efforts as we verify your claim. If everything checks out, you'll be off the hook in a few days. Disputing with Debt Collection agencies TrueAccord's process is not the standard in debt collection. First of all, you only have 30 days from getting the first message to dispute the debt, or it will be considered valid. You also have to do so via certified mail, because collectors don't have an online interface to let you dispute easily, and you must make sure your message was received. Don't pay to make them go away! Any promise and especially any partial payment you make may be considered acknowledgement of debt. Don't tell collectors to stop contacting you, either - you may just find the debt on your credit report. We want to prevent that. Instead of paying, immediately mail a standard dispute letter - the CFPB versions are great. Whenever you get a call from collectors, let them know that you're disputing the debt. Don't engage - wait for debt validation. After initial Debt Validation Many collectors will stop once you dispute your debt, especially if it is for a low amount. Others will send you more details about your alleged debt. This is the time for you to read carefully, and be 100% convinced that you don't owe it. Don't pretend to not owe - false reporting will be costly if the case ever goes to court. Be absolutely sure and be ready to prove it. If you are certain, mail the agency again and let them know that the debt is still disputed. Make sure that the letter includes a demand to report to all subsequent collectors and reporting agencies that this debt is disputed, as this marking places limitations on what can be done with your information. If all of this doesn't help, that would be time to get a lawyer to defend you from the debt collection process. Bottom line Debt collection is stressful, and disputing a debt you don't owe is often more difficult than it should be. Keep calm, understand the details of the debt, and act according to the process laid out by regulation so you're covered. If you have any questions, email us at support@trueaccord.com and we'll try to help!  

Why did we use Scala as our main backend language? Given what we needed to accomplish when we founded TrueAccord – and how we intend to grow – Scala quickly emerged as our ideal programming language. From its interoperability with Java  to its emphasis on functional data structures and economy of code, Scala has delivered an incredibly versatile engine to power TrueAccord’s Proactive Loss Management system for recovering debt portfolios worth tens of billions of dollars. Of course there are solid arguments for a range of programming languages. Java may seem the obvious choice, given its popularity and the breadth of its libraries. But many developers rate Java pretty low on the fun scale. There’s the ever-popular Python and Ruby, which many feel are optimum for the front end, but we wanted to use a single language for the entire stack. We actually started in Python, because our core team was very familiar with it. Python allows you to get off the ground really fast, but as the code grew and more people joined the team, Python’s lack of type safety started to slow us down. Despite our disciplined unit testing, things got messy very quickly. It took quite a bit of reasoning to be completely sure what each function expected as arguments and what it returned. Ultimately we realized we needed something that would make it easy for us to write robust, maintainable and type-safe code without hindering the team’s productivity. Scala was the answer. Interoperability with Java Scala allows us to access Java’s huge ecosystem. Java has been around enterprises for a long time, and there is a wide variety of high-quality libraries for any imaginable functionality. From essential libraries like Joda-Time to the handy utilities in Apache Commons, Java has it covered. It’s also very common to see third-party service providers like payments processors provide Java libraries that access their APIs, which saves us hours of integration work and makes it easy for us to quickly experiment with many platforms. This is how TrueAccord is able to personalize correspondence with individual debtors and make it easy for them to pay creditors via a number of different methods. On top of that, the JVM provides a robust environment to run our code. There’s a variety of parameters we can tune and many tools available for monitoring, artifact deployment and so on. As Scala runs on top of the JVM it enjoys this rich and mature ecosystem. Functional data structures When you are writing non-trivial computations, especially in a multithreaded environment, it’s easy for things to go awry. In languages like C and C++ it’s common to have a state that is shared between different threads. When you go that route, you have to be careful about using locks or mutexes around each access to the state to ensure that no two threads can modify this state at the same time. It’s very easy to make mistakes in this regard. Scala encourages writing pure functions that manipulate immutable data structures. When your data structures are immutable, you can freely share them between different execution contexts, and deadlocks and race conditions become things of the past. Economy of code Scala is a very expressive language. And yet it lets you express your ideas with very few lines of code. When you define a case class, you are actually communicating a higher level abstraction that relies on other types. For example, a Person could be a case class that consists of a name, age and an address. The address could be another case class with fields like street, city and zip code. By defining types in this way, usually in one or two lines of code, Scala provides a functionality that is equivalent to 20 to 30 lines of Java code. The savings here comes from not having to implement constructors, getters, equals() and hash() methods. There are many other examples like this that allow the Scala programmer to write fewer lines of code that say quite a lot. This leads to fewer bugs and less code to read and review. This is not to say there are no drawbacks. Like any technology, Scala is not perfect. For example, Scala code that uses functional programming idioms can be a little confusing to newcomers, but you get better at reading and writing functional code with practice. It’s the same as lifting weights to build muscle. Another drawback is the compilation time. It can take a little while for the compiler to go through a full build, but on the other hand, having immediate feedback from the compiler on mismatching types and other common human errors helps recover that lost time.At TrueAccord, this level of code correctness saves us invaluable time and money in the long run.

This is an attempt to collect a debt. Any information obtained will be used for that purpose. I can’t think of anyone who’d enjoy getting a message that includes this disclaimer. Especially if they have a problem repaying their debts. The mini-miranda, as it’s called in the collection industry, is a mandatory notice letting you know that the debt collection process has started. What happens now? Is it too late to back up? Is your credit ruined? So you got a notice from a collector First, this is not the end of the world. There are ways to deal with collectors and the law provides you with reasonable protection, as long as you follow certain processes. We know you are probably stressed - whether you think you owe money or not. Take a deep breath, and let’s go through it… Should I speak to the collector? You don’t really have to speak to them - when we contact you, emails are good enough. But you should definitely communicate with a debt collector. Communicating doesn’t necessarily mean that you’re going to pay or that you’re admitting to anything, but it will help you get a better grasp of the situation, and what’s demanded of you. Furthermore, many collectors opt to just sue debtors in court and get a default judgement without negotiating, because they’re used to debtors refusing to talk. If you communicate, you will probably completely avoid any legal issues - and there’s literally no downside other than some time spent. Do I really owe this? First you may feel like you don’t really owe what you’re told you’re owed. Have you read the contract you signed with this creditor? Have you read all the fine print? Many contracts stipulate late fees, early termination fees and other liabilities that you may not be aware of. If you are a merchant using a payment gateway, for example, you probably don’t know that you’re liable for your customers perpetrating fraud; but indeed you are. Be aware of the facts, because lack of knowledge works against you and will get you a worse settlement. If you’re not sure whether you really owe anything, a good first step would be to ask for debt verification. You won’t get your debt cancelled so easily but the process grants you a few days of quiet when the collector gathers this information, and it will get you more information about the debt if you don’t remember it. The only catch? Debt collectors require that you send a written letter to initiate the process, and may aggressively call you in the meantime. You also have only 30 days from the day of the first notice to mail that request for additional information. When you work with our Loss Management process, a simple online form will do; but be careful when dealing with debt collectors that prey on that time gap. Negotiating with a collector First point about negotiation: unless you were utterly wronged, you should pay your debt. If you were wronged and can prove so in court, this guide may not be for you - you could have a legal case. If you don’t, however, whomever you are, you’re not a deadbeat and you’re willing to work out your issues - you just need some time. Don’t mislead yourself: not paying hurts other people. It hurts the stability of the business they work at, it forces the business to make up for the loss someplace else, and it is generally the wrong thing to do in a civilized society. There’s a reason why the law allows one to sue if a contract isn’t honored - we expect people to be true to what they agreed to do (provide a service, pay a bill) because otherwise, we won’t be able to trust one another. You’re not exempt from that. Not paying can hurt your financial prospects as well. You may think that having negative marks on your credit report is unavoidable. Maybe you’re close to giving up. Don’t let yourself lose hope and become oblivious. With the right type of help, you’ll be able to get back to financial safe ground - it will just take time. So, when do you negotiate? Negotiating with a collector is aimed at balancing the potential negative effects of non payment (ruined credit if you get reported, hurt reputation, and potential legal action) with your own solvency. Inefficient collectors profit from interest and fees on payment plans; when you work with TrueAccord, we never add any interest or fees to get profitable at your expense. In addition, as long as your debt hasn’t been sold, creditors will limit the size of settlement discount that you can get, even if you pay the whole amount in one shot. Between potential add-on costs and the limitation on collectors’ ability to discount the debt, what should you aim for? The best option is to try and get a 10% discount for a single payment for the whole discounted amount, if you can get that. Try to get a better deal for a direct debit; you’ll have a harder time getting a good deal with a check or card payment. Some collectors are able to take online payments; try to work with those, and follow their charges to not get overcharged. The second best option is a flexible payment plan for the whole amount. As noted before, most collectors will tack on interest and fees to the plan, so you’re better off with a short term plan. If you’re paying the whole amount in large chunks (bigger than 20% of the total for each payment), you may be able to scrape a small discount off the top. Make sure that you get the payment plan’s details in writing, and follow up on its progression with every payment. Also, it’s most important that you make sure your actual debt is paid first. If payments go to fund interest and fees, you’ll be digging yourself further into a hole instead of solving your debt problem. A good collector will help you do that, instead of milking you as much as they can. Afterthought Being in debt isn’t fun, but is a manageable situation when you work with the right type of partner. If you find yourself in debt, do your best to choose the right collection partner for you; one that cares about your long term prosperity. Deal with debt early, keep all documentation and make sure that you’re informed regarding the contract you signed and your right. And, most importantly, never take credit obligations you don’t think you can meet; the results can be devastating!