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Keeping up with collections

Hi Thea,
We have a delinquent customer that is now part of the National Debt Relief program. What are our options for collecting, if any? What kind of proof can we request of our customer that this is true?

— No Relief for Us

Dear No Relief,
Remember when you were little and would fall while on a trampoline and everyone would keep jumping so you couldn’t get up? That is credit management. Every day, some new twist shows up that makes you question how this role should work.

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Someone applies for credit, you give them credit, they purchase product, they pay for it in the agreed terms. Easy peasy, right? If only life in credit was that simple. There is always something new or some twist to keep you on your toes.

Credit repair and debt relief services—it sounds so good: fix your credit, remove negative items from your report, consolidate and negotiate down your debt. “Call us, we can fix this,” is the motto. Sleep soundly again. This is actually a recycling of a decades-old cottage industry that has been around since credit reporting began back in the 1800s and makes headlines when there is any economic disruption. It has now grown, as of last calculation in 2022, to a revenue of $4.4B—BILLION—according to the data company IBISWorld.

The truth is these companies can’t do anything for a customer they can’t do for themselves. It is called negotiation, paying attention to your credit report, policing the information and working with your creditors. They can’t make negative items go away simply because you don’t like them. If the information is current and accurate, no one can make it go away.

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Let’s talk about that name. National Debt Relief program. Sounds like a government agency to help out some folks that are in a pickle. There is no national debt relief program. There are a lot of buzz words out there on our national debt, lots of debate, so the name of this company sounds like it could be a government program.

WRONG! It is a company, one of thousands that offers to take over dealing with a company’s debt—for a price. Their service offers to take over negotiating down each account, making the payments, looking into the credit report to remove items, etc. The main attraction to signing with them is the claim that they will stop the collection calls. Naw, bro, nothing stops debt collection efforts except bankruptcy.

Did your customer tell you when they signed up for this service and who the contact person is at National Debt Relief program? Your customer should be able to tell you who they are working with at the company and provide a contact name. Run a credit report on this company, along with a Better Business Bureau check and lastly, Google that company. That is where most of the dirty laundry shows up. Check to see if the person assigned to “work this out” is certified with the International Association of Professional Debt Arbitrators.

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Contact your customer all you like. This is not like bankruptcy where they waive a white flag and the game is over.

Your customer may have enlisted the aid of a company to help them sort themselves out, you did not. You have no idea when or if you will hear from this group anytime in the near future. You have decisions and choices to make to keep your company’s cashflow safe.

Whatever you are not challenging, you are choosing. Read that again.

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