Unfair collection tactics

Last week’s column on unethical collection practices drew a lot of reactions and rejoinders from my readers. Actually, this is always the case when I write about this kind of topic. In my over 17 years as an executive of CIBI Information, the leading business information and receivables management company in the Philippines, I am always asked several questions pertaining ”unfair collection tactics” being employed or done by some third party collector or collection agencies.

Again, I will be discussing in this column some of the more frequently asked questions (FAQ) pertaining to debt collection practices and what to do when you encounter one:

1. What if a Collection Agency tries to collect a debt I don’t owe?

Personally, I believe that no legitimate Collection Agency or Receivables Management company such as CIBI Information wants to spend time and effort talking to the wrong consumer/ debtor about a debt. All ethical third party companies have procedures to correct problems such as these. If you do not owe the debt the collection company has written to you about, report this fact immediately in writing and provide the collection company with facts supporting your position. If you challenge the validity of the debt in writing within 30 days of the first notice (demand letter) to you, the Collection Agency will halt collection efforts until verification has been received from their client/ creditor. Once the creditor has responded, the collection company will verify the debt to you in writing or by calling. Normally, if the creditor is unable to verify the debt, the Collection Agency will cease collection efforts.

2. What if I won’t pay a debt for a faulty product or inadequate service?

As a consumer/ debtor, you should not wait until an account has been turned over to a collection agency or Receivables Management company such as CIBI Information before complaining about faulty merchandise or inadequate service. You should attempt to resolve the problem with the creditor before the account ever gets to a collection stage. Otherwise, it might appear that you are using this technique to further delay payment. However, there are cases where a consumer has pursued a legitimate complaint, yet the account is still turned over to a third party collector. In this situation most debt collectors are prepared to assist in clarifying the problem in order to arrive at a solution that is satisfactory to all. If you don’t intend to pay a bill because the product was faulty, or similar reasons, contact the third party collector immediately and explain the problem. Afterwards, a formal letter to this effect must be made. Collectors are prepared to listen and may try to help. Always remember that by asking you to put it into writing, you are not only helping the collector simplify the situation but also yourself to resolve the matter more easily.

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