The right way to collect debt

Before you follow up on debt, you want to be sure you supplied the right goods and services, in the right quantities, to the agreed standard, for the agreed price and within the agreed timeframe.

In collecting a debt, you must not use force or pressure, or harass or hassle anyone, or mislead or deceive the debtor. You must not pass on false or private information, and you cannot charge unreasonable debt collection fees.

Do not tell a debtor that they will be fined or face legal and court costs on top of the original debt. This is a breach of the Fair Trading Act.

One approach that’s proven successful is to visit slow payers and ask them how they are finding your company’s service. One businessman reports that with this approach he almost always got payment on the spot, or soon after.

For advice on managing debt, contact a Moore Stephens Markhams advisor today.

Published winter 2017.

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