A collections specialist works for a debt collection agency and contacts borrowers who have defaulted on their debts or who have not paid their bills on time. Specialists must first locate debtors before attempting to collect payment through debt settlement negotiations. A collections specialist typically earns a base salary, but some companies offer bonuses to employees who successfully collect past-due debts.
Many collections specialists come from a lending or banking background. Some collection agencies demand that specialists have finance or economics degrees. Other companies prefer to hire salespeople who are accustomed to making proactive tele-consulting calls.
Consumer credit reporting agencies maintain details of credit accounts in many countries, and lenders obtain reports from these agencies before extending new credit to consumers. Consumer credit reports must be well-understood by a collections specialist. When borrowers are made aware of the damage a delinquent debt has caused to their credit report, many of them agree to settle.
Each collections specialist is assigned a number of past due accounts by a departmental manager, who attempts to contact the debtor using the contact information provided by the lender. The phone numbers or addresses provided are frequently incorrect, but laws in some countries allow collection agencies to contact the debtor’s relatives to obtain the correct contact information. If the agency’s collection specialists are unable to locate the debtor, the matter is usually referred back to the lender. In some cases, rather than assisting lenders in debt collection, collection agencies purchase the debts from the lenders. Specialists frequently devote more time to researching debts that have been purchased rather than debts that are still owned by others.
Many countries have laws in place that limit collection agents’ ability to harass debtors. In some areas, a collection agent is prohibited from calling a debtor at certain times of day, such as early in the morning or late at night. Generally, laws prohibit a collections specialist from making false or misleading statements about the consequences a debtor may face if the account is not settled. As a result, specialists must familiarize themselves with national and regional debt collection laws, as violating these laws can result in fines in some countries.
Some countries’ laws allow collection agencies to take legal action against debtors who refuse or are unable to pay their debts. A collections specialist must usually notify the debtor in writing of the impending court action and may be required to file papers with the court. Agencies can often garnish the debtor’s wages or even place a lien on the debtor’s home. The court case is usually handled by a lawyer, but the debt collector who attempted to collect the past due debt may be called to testify in court.