Need For Debt Collection ServicesDebt by its very nature requires a task force to be instituted to recover it. This is because debtors gain a psychological edge over the loan/products/services providers once they receive the loan/products/services. This psychology introduces the need for debt collection services for recovery of money from debtors. People by their very nature want as much money as anyone can give them. However, when it comes to paying back monies owed to others they usually dilly dally, make excuses, or cite various reasons why they cannot pay back at the time due for it. Most of them think that loan/products/services providers cannot do much about it at least till a certain stage is passed. The US federal government has been on the one hand in favor of debtors to prevent their exploitation by lenders. It has instituted the FDCPA (Fair Debt Collection Practices Act) to prevent exploitation of debtors by lenders. The basic premise behind this has of course been because of the psychology of lenders (in a better placed situation) to take advantage of debtors (in a difficult one). However, at the same time, the government has provided strict action against erring debtors once the concerned lenders comply with FDCPA requirements and follow elaborate legal procedures. In such a background, debt collection services tactfully tread the middle ground between taking a very hard stance against debtors and simply requesting them to pay up. People by their very nature forget the debts they owe others but never the loan that they have provided to others. It therefore comes to an emotional tussle between lenders and debtors for the contentious issue of payment and direct involvement of lenders mostly fails to recover debts. Successful debt collection services are because of this mostly provided by third parties. These parties are not tied down by the emotional interplay between lenders and debtors as they are not directly involved. Debt collection is simply a task for them to be performed to earn their living/profits. Their tactful e-mailed reminders well before the due date of the installment repayment date are taken as well-meant help by debtors. Even when the due date is crossed, the polite reminders from debt collection service providers do not fail to have the desired effect on debtors. Some debtors are by nature quite aggressive. They even sometimes abuse the collecting agents. Faced with this situation lenders mostly also reply in kind because they are involved. Such abusive replies therefore fail to evince debt recovery from such debtors. However, debt collection services bypass this interplay completely. Collection agents, who provide debt collection services, are trained to remain cool under abusive talk from debtors. They are under instructions to achieve their ultimate goal which is to tactically coax debtors into making due payments in time. Debt collection services are therefore largely successful in recovering debts from defaulters because of their objectivity whereas lenders fail. The service providers reap contingent fees from lenders for services rendered. |