Debt Collection – is ‘Mediation’ your first thought?
I spotted a report in the news recently about MPs warning local authorities not to start dispatching bailiffs to retrieve money from people who had fallen behind on their council tax.
There was a “growing tendency” for councils to rely on bailiffs to collect tax arrears and that the practice was “wasteful and punitive”, it said, while adding hard-line debt recovery tactics had been “widely abandoned” by the private sector because they were costly and ineffective.
To which I say, hear, hear!
Due Process in Debt Collection requires Mediation
The public largely still think of debt collectors as muscle-bound heavy men lumbering up to the door flexing their tattoos like nightclub bouncers with less jewellery but more charisma.
It’s a model long since cast aside by business.
Many people still presume that these chaps are the only means of redress available; after all, programmes along the lines of If You Can’t Pay Then We’ll Embarrass You on National Television have been reality show staples for some time.
By and large, though, it’s a model that has long since been cast aside by businesses who recognised a while ago that such heavy-handed tactics were seldom effective. Our chief weapon when it comes to retrieving money owed is not aggression, but mediation.
For a start, there are the due processes to follow and while a court order authorising retrieval of money or equivalent goods is a last resort, it very rarely comes to that.
Mediation between the two parties is our first response and it means taking time to listen to both parties. After all, there may well be a good reason why people are not in a position to pay. After that, we assess what the next practicable steps could be.
If the person who owes the debt cannot pay the full amount but agrees to begin making scheduled payments, that’s great . . . but we also need to pin down whether they can afford the sums they are offering or are just saying something to pacify our client.
Mediation offers the best debt collection outcome for all
A speedy, amicable solution is in everyone’s interest
Mediation is a Skill
Good mediation requires negotiation skills, which are about building up trust and gaining the confidence of the person in debt and not appearing to judge them. At the same time, we need to stay professionally objective and operate within ethical boundaries.
Mediation can be a really effective way to bring about a resolution to problems that may have dragged on for a long time. And time matters in business, as we know, so a speedy, amicable resolution is in everyone’s interest.
Inevitably, there are times when there is no other recourse but court orders and action to retrieve goods and we then work closely with licensed enforcement officers who are authorised to enforce High Court writs and recover money.
But, as I say, these outcomes are rare.
Mediation on Reality TV?
In the current climate, it seems likely that – as the story I read highlighted – councils and other public bodies will be resorting to debt collection services to retrieve unpaid bills they are owed by individuals.
But I hope they recognise that it is still better to talk first.
Perhaps a new TV show could help spread the message. Something, perhaps, along the lines of Keeping Up With the Conciliators or The Only Way Is to Sort Everything Out Over a Nice Cup of Tea which I think might benefit from the understated presentational style of Davina McCall.