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Exus Blog Article

The Do’s and Don’ts of Debt Collection

5 minute read


Debt collection is a critical aspect of financial management, often involving delicate interactions between creditors and debtors. The intricate nature of this process demands a nuanced approach that balances the need to recover debts with ethical practices and legal guidelines. Understanding the Do’s and Don'ts of debt collection is pivotal in maintaining a healthy and sustainable financial ecosystem. In this article, we delve into the essential guidelines, strategies, and ethical considerations that can guide effective debt collection practices while upholding the rights and dignity of all parties involved.

The debt collection process involves some or all of the following elements:

Service: ​

Contact the delinquent customer and remind him or her of being past due or delinquent.

If there is a need, update any record such as home, business address, and telephone numbers. ​

Most importantly, probe for the reasons behind the late payment so an appropriate and effective approach can be followed to deal with the situation. ​

Get the customer to commit payment date after understanding the customer’s cash flow, and ensure the customer understands the need to keep his obligation in order and what the consequences of default will be should he fail to keep his obligation. ​

In case a promise is broken, the Collection Officer must reinforce the need for immediate payment. ​

Send a periodic reminder to customers who are likely to be lazy or forgetful about their payment on time. ​


If a customer cannot be contacted, concentrate on establishing their whereabouts and gather information. ​

Basic information of the customer is available in his/her application form. The person or telephone number stated in the application must be processed to locate the customer. ​

If this fails, the skip-tracing team should pursue the customer. ​

Contact: ​

Customers who do not respond need a more aggressive approach. ​

The agent should handle the customer’s reason or excuse for no payments. If the previous effort​ was not successful, it may be assumed that the customer didn’t take their obligations seriously; neither the obligation to pay nor the obligation to provide reasons for not doing so. ​

To gain a customer’s attention, it may be necessary to send a communication to inform the customer of the effects and consequences of their failure to make their payments.


Debt collection is also like selling: you are selling the payment to the customer. Once an agreement is established, it is still a formidable task to convince customers to submit a payment. ​

The agent shall “sell” the customers on their idea of paying their delinquent account. ​This demands the best of the agent’s skills to convince him to eventually make a payment. ​


Repossession is the last option in collections along with the legal actions. ​Both may be used separately or in conjunction depending upon the situation. ​The cost of any action must always be considered. ​


When all collection effort fails, litigation may be the last resort to resolve the default status. This is a tedious and expensive process, however, and needs to be well-considered. ​​


We will take a detailed look at the Do’s and Don’ts of debt collection in the next section but first, it is important to understand the essential Do’s and Don’ts that are outlined by the Fair Debt Collections Policy and enforced by the regulatory authority of respective countries. Employing a systematic approach to debt collection that adheres to legal regulations, such as the Fair Debt Collection Practices Act (FDCPA) in the United States, is imperative.

Regardless of the different policies or acts that govern the Do’s of debt collection activities in any country or region, they all lead to a few specific approaches, such as communicating clearly and respectfully with debtors and providing them with accurate and comprehensive information about their debts. Offering feasible and flexible repayment plans, actively listening to debtor concerns, and maintaining a professional demeanor can facilitate a more amicable resolution. Additionally, documenting all communications and transactions for future reference is crucial to ensure transparency and accountability.

On the other hand, when we look at the governance policies on the Don'ts, we clearly see that it is essential to avoid engaging in abusive, threatening, or harassing behavior towards debtors. Misrepresenting the debt, using deceptive tactics, or making false claims to coerce payment violates ethical and legal standards. Violating privacy by discussing debt details with unauthorized individuals or using inappropriate language that can be construed as abusive is unacceptable. Furthermore, pursuing debt collection beyond the statute of limitations or ignoring cease and desist requests can lead to legal repercussions. It is crucial to avoid any practices that could harm the debtor's reputation or cause emotional distress.

The Do’s of Debt Collections

When engaging in debt collection, it is essential to adhere to a set of best practices to ensure ethical and legal compliance. The Do’s include maintaining clear and transparent communication with debtors, providing accurate and detailed documentation of the debt, and treating debtors with respect and dignity. Employing negotiation and payment plan options can facilitate a smoother resolution. A list of such Dos is explained below which can be easily understood and put into practice. 

Communication with Clarity and Respect:
Maintain clear and respectful communication. Communicate with debtors in a clear, respectful, and professional manner, fostering a cooperative and transparent environment that encourages open dialogue and understanding.

Documentation and Record-Keeping:
Furnish accurate and detailed documentation of the debt, including clear records of transactions, invoices, and any pertinent agreements, ensuring complete transparency and clarity in the debt collection process.

Verification and Validation:
Verify the debt's legitimacy and provide validation when requested by the debtor. This ensures that the debtor acknowledges and understands the debt.

Empathy and Understanding:
Show empathy and understanding towards debtors who may be facing financial hardship. Work together to find solutions that suit both parties.

Dispute Resolution:
Provide a clear and accessible process for debtors to dispute the debt. Respond to disputes promptly and professionally.

Offer Payment Options:
Display flexibility by offering negotiation options and setting up feasible and mutually beneficial payment plans, demonstrating a willingness to accommodate the debtor's financial situation and facilitate a fair resolution.

Legal Compliance:
Treat debtors with respect and dignity, acknowledging their rights and preserving their self-esteem throughout the debt collection process, thus fostering a more positive and cooperative relationship.

Data Security:
Safeguard debtor information and maintain data security to protect sensitive personal and financial data from breaches.

By emphasizing these best practices, debt collectors can maintain professionalism, foster trust, and increase the likelihood of successful debt resolution while upholding ethical standards in their interactions. Emphasizing these Do’s helps establish a fair, ethical, and compliant approach to debt collection that respects the rights and dignity of debtors while still pursuing the collection of owed funds.

The Don’ts of Debt Collection

On the other hand, the Don’ts involve avoiding harassment, threats, or any form of abusive language or behavior towards debtors. It is crucial to abstain from misrepresenting the debt, using deceptive tactics, or disclosing the debt to unauthorized parties. Additionally, refraining from contacting debtors at inappropriate hours and respecting their right to dispute the debt are vital aspects of maintaining ethical debt collection practices. A list of such Don’ts is explained below for easier understanding and practice.

Harassment and Abuse:
Avoid any form of harassment, threats, or abusive language or behavior towards debtors. Respect their privacy and refrain from using aggressive or intimidating tactics.

Deceptive Practices:
Refrain from using deceptive or misleading tactics to force payment. This includes misrepresenting the debt, falsely claiming legal authority, or providing inaccurate information about the consequences of non-payment.

Unauthorized Disclosure:
Do not disclose details of the debt to unauthorized third parties. Respect the debtor's privacy and avoid discussing their debt with individuals who are not directly involved in the collection process.

Unlawful Contact:
Avoid contacting debtors at inappropriate hours, such as early mornings or late evenings. Respect their right to privacy and refrain from persistent or excessive contact.

Ignoring Disputes:
Do not dismiss or ignore a debtor's dispute about the debt. It is essential to address any concerns or disagreements promptly and work towards a resolution in good faith.

Violation of Legal Rights:
Do not violate any legal rights or protections granted to debtors under applicable laws and regulations. This includes ignoring requests to cease communication or disregarding legal restrictions on debt collection practices.

Public Shaming:
Avoid any form of public shaming or humiliation of debtors, including posting their information on social media or publicly disclosing their debt status.

Intimidating Actions:
Do not engage in any coercive actions, such as threatening legal action without intent to follow through, or seizing property without appropriate legal authorization.

By avoiding these emphasized Don'ts, debt collectors can maintain a professional and ethical approach to debt collection that upholds the rights and dignity of debtors while ensuring compliance with relevant laws and regulations.


Effective management of debt collection requires a delicate balance between assertiveness and empathy, legality and ethics. Adhering to the Do’s and Don'ts outlined above is crucial for establishing a transparent and respectful debt collection process that upholds the rights and dignity of all parties involved. By fostering clear communication, maintaining accurate documentation, and demonstrating an understanding of debtors' circumstances, a fair and equitable resolution can be achieved. Simultaneously, avoiding coercive tactics, deceptive practices, and any form of harassment is pivotal in preserving the integrity of the debt collection process and nurturing a conducive environment for financial transactions. Ultimately, a responsible approach to debt collection ensures the retrieval of owed funds and promotes goodwill, trust, and sustainable relationships within the financial ecosystem.







Written by: Marios Siappas

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