Last week we began our look into a situation most of us would rather avoid, and that’s getting a call from a bill collector concerning a very old account – so old, in fact, that you have no idea if it was paid, or if it is even your account.

We learned from former bill collector Ed Lewis, author of “Collection Agency Secrets Exposed,” that a knowledgeable consumer “has far more power and influence than most people would ever think possible, and that it is absolutely critical to understand what the collector is hoping for when you answer.

“It’s catching you off-guard, making you feel intimidated or somewhat threatened and then getting your agreement to pay for this bill which, because it is so old, you might not owe and which might not even be your’s in the first place. Knowing what to say, and more importantly, what not to say during all of your contacts with collectors can have enormous impact on your bank account and credit report,” he cautions.

Do they have the right person?

Is it really your bill? You need proof – actual documentation – especially if it is a very old account. The older it is, age of that account becomes critical, as there could easily be statute of limitations issues, making it too old to successfully sue on, even if it is your bill.

“Federal law requires validation of the debt, and this means that the collector must give you copies of all of the documents – bills, receipts and anything you’ve signed – which supports their belief that you owe the money. They have approximately 30 days in which to comply with the law.”

“So, during that first phone call, ask for it and politely tell the collector that if they cannot obtain the information, to delete the entry from your credit report, as law requires,” Lewis strongly recommends.

“Also obtain the collector’s name, the company name, address, fax number, and their in-house reference number for your account. Tell the caller that you will only communicate with them in writing. This will result in the collection agency taking you seriously, because it’s clear you know your rights,” he maintains.

Get a deletion agreement

Let’s assume that within 30 days, you receive that validation, and it is indeed one of your old accounts, completely forgotten about, but you also learn that it is on your credit report. Let us further assume that it isn’t that old, so that you could be sued and there would be no statute of limitations defense available. Your best bet is to arrive at a compromise figure with the collector. But you would also like this off of your credit report. Is that possible?

“Bill collectors just want to collect money and have a contractual duty to their own clients to do so. They also have the ability to request the deletion of an account through a process called a Bulls Eye. This is true even if they tell you that they cannot. Deletion of an entry in a credit report is done through a computer system called e-Oscar, and it takes from 24 hours to 10 days for a credit bureau to update the credit report.

“If you are told that it isn’t their policy to delete accounts, ask to speak with a supervisor. Make it clear that you will pay the agreed-on amount only if the account is removed from the three credit bureaus, and that you want a letter which states this before you pay. This is absolutely critical, because there are collectors who will tell you that, but then do nothing at all, and you have no written proof of their agreement.

“But it is so important for another reason. Without a written settlement or deletion agreement to resolve the matter for less than the full amount claimed owed, real trouble can lie ahead.

“Here’s why: At some point, that account can be sold to a debt-buying company for pennies on the dollar. They could easily be unaware that you settled in full, because the records do not reflect that, and there is no letter from the agency proving it. Then, collection activities begin again.”

A blessing in disguise

“That call from the bill collector can be a blessing in disguise. A tremendous amount of good can come out of what most people would consider to be a negative experience. Just remember that the collector is almost always willing to compromise.”

“So, in most instances, by agreeing to pay some money, your offer will be accepted, the debt goes away, and a bad entry will be taken out of your credit report,” the former bill collector wants the public to understand.

His book can be found at www.collectionagencysecrets.com.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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“Dr. Tom,” as his patients love to call him, is a young dentist in California’s Central Valley not far from Fresno. “He is the gentlest person I could ever imagine going to,” his receptionist, Traci, e-mailed You and the Law.

“I am turning to you for help, because Rachel—who handles billing and collections—is doing a horrible job, and he is not dealing with the situation.

“May we talk about this? He will pay attention to what you say, because I often see your column on his computer screen – he a big fan!” she added.

Ten minutes later, I was speaking with the kind of employee who you just wish could be cloned.

Only 22, Traci has maturity, dedication and guts, rare in itself, but exceptional for someone her age. She cares about her employer’s financial interests – while the person whose job it is—does not.

“After working in a group practice for a few years, he started his own, and that was when I was hired.  This is a very busy office but collections are a serious problem, and Rachel—in charge of billing and getting us paid-is a wimp!!” Traci complained.

Patients cry and she cries with them!

“Rachel is a retired elementary school teacher and is extremely nice, but too nice to patients who are obviously trying to take advantage of our office. She is also a childhood friend of Dr. Tom’s parents.

“Many of her calls to past due accounts are on a speakerphone, and I’ve listened as patients come up with the same tearful excuses for not paying which they used months earlier!  They promise to catch up payments, but we get nothing!

“This is so crazy that when patients cry, I have heard Rachel sob with them! She is being conned, and worse yet, she doesn’t flag the chart-or warn the other staff members — so the same, dead-beat patients come back and are treated again!

“When I ask her about this, she says, ‘Well, you need to have sympathy for these people.’

“Sympathy?  Where is her sympathy for our office? Whose side is she on? I have discussed this with the dentist, but he says, ‘We need to be a little more patient with Rachel, she a friend of the family.’

“Dr. Tom does not like confrontation. I am worried that he will get into financial trouble-putting our jobs at risk—if something doesn’t happen soon.”

It takes a very special person to handle this important job

“Your dentist reader has one giant toothache and seems headed for a root canal. This is a far more common situation than most people realize,” were the first comments from a friend of this column, Lake Oswego-based Gary Goldstick. He is one of the nations most successful “business doctors,” and author of a number of books, my favorite which is Business Rx: How to Get in the Black and Stay There.

“Collections are absolutely critical to the survival of any company, but the average bookkeeper or person in charge of billing is not tuned into this,” Goldstick underscores.

“They see collections-especially past-due accounts—as a burden, while the right person in the job looks at it as a challenge, has heard all the broken promises and knows when to turn a bad account over to the company’s lawyer or collection agency. They don’t sit on bad accounts for months, listening to one phony excuse after another.

“Especially critical is being able to tell the boss when to turn off the tap – to stop providing services, just as gutsy young Traci has pointed out.

“It takes a very special person to handle this important job-someone not afraid of confrontation— and few people have the skills plus the thick skin needed to do it well. Having the wrong people performing the billing and collections function can cause enormous damage, even put the business at risk,” he stressed.

“Coming from an elementary school teaching background, Rachel has shown herself clearly unsuited for collections: Teaching young children requires a great deal of empathy and hand-holding. Teachers must be nice to children.

“A billing and collections person needs to be polite, firm but not too nice, for if they are, the door to being taken advantage of by dead-beats is flung wide open. Yes, it’s alright to care- not be an aloof bureaucrat-but they should not care that much. What they absolutely must care about is their employer – holding their employer’s interests paramount.

So, what should an employer look for in this search for the right collections person? Next time we’ll give you a by the numbers checklist, and tell you why it is so risky hiring family friends.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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Last time we told you about Dr. Tom, a busy dentist in Central California with “a monumental collections tooth ache, well on the way to needing a root canal,” in the opinion of one of our nations foremost business consultants, Gary Goldstick, based in Oregon’s beautiful Lake Oswego.

“One of the greatest threats to any enterprise or profession is failing to devote the same amount of attention-if not more—to getting paid as making more sales, or attracting new clients,” he observes.

A friend of this column, his comments came as a result of the email Dr. Tom’s gutsy receptionist, 22-year-old Traci, sent us, describing an employer who is dramatically incompetent when it comes to, “having the right person in one of the most important roles in any business, billing and collections,” Goldstick finds.

“It does not matter what business you are in. If money isn’t coming in when it should, the very existence of your company-and the jobs of all who work there-will be at risk. I can’t overstate how often a major contributing factor leading to business failure is having the wrong person in that crucial position.

“Cash flow is one of the first things a business consultant looks at; is there enough to keep the doors open, bills paid, the employees paid often we find the person in charge lacks the personality needed to deal with the challenges of getting customers to pay their bills.

“But, Dennis, you would be amazed at how that relatively obvious fact of financial life is completely ignored, from mom and pop small business owners all the way to some of America’s largest corporations, law firms and health care professionals.”

Hand holders and family friends need not apply

“When hiring for the ‘cash management’ position first consider who you don’t want to have in that position — and that’s a person with too much empathy — who cares too much. On a 0 -10 empathy scale, you want someone with not more than .5.

“In this job, you do not want a hand holder — someone who is so warm and has so much empathy that they make excuses for and emotionally identify with the person who is not paying their bills, believing their always sad stories.

“But, you don’t want a screaming, sociopathic monster, either,” Goldstick was quick to add.

Family friends – Best advice, don’t hire them

“When you’ve hired family friends for key positions in your company, if things go wrong and they can’t do the job, it is never easy to end the employment relationship.

“It’s an invitation for conflict with your own family; and the delay which often occurs before that plug is pulled causes further damage to the company.

“So, the safest bet is to retain your sanity and the friendship by not hiring a friend or relative in the first place.”

Look for these qualities

Goldstick feels that the right person in this critical job needs to have these personality qualities:

• Has good social skills as they are on the phone all the time and can send this message: “I’m here to help you. If it wasn’t for me, you would have been sued by this time.”

• Is highly motivated to prevent delinquent accounts turn to garbage. Sincerely cares about the welfare of the company. When hearing a problem from the customer, they can separate a legitimate reason that a payment is late from a meaningless excuse.

• Is able to obtain the debtor’s cooperation.  For example, “I can understand why that would be a problem. How long will it take you to fix this so that you can start paying us?”

• Is mature, having years of life experience, such as married women 50 years with kids. Why? Middle-aged women tend to do very well in this job as they are natural helpers and often can see through a con job.

• Is soft spoken but firm, never insulting, never critical and always carries the flag of the company.

• Can be frank and is capable of confronting the customer when she detects they are playing her for a sucker.

• Has self-confidence. Is able to get the boss’s attention especially when the past due account is a “friend of the owners” and the tap needs to be turned off.

Goldstick summed up his “prescription” for business owners with this key observation:

“Asking for money is a fundamental skill to anyone who is working in accounts receivable, just like being to do the job of a plumber or auto mechanic.  If there is someone who has that responsibility and cannot do the job-either lacks the skills, personality or motivation, replace them!

Gary Goldstick’s website is www.ghgoldstick.com

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

The post What makes the right billing/collections person? appeared first on Dennis Beaver.

“I have been receiving calls from an unpleasant bill collector about a department store account that is almost 4 years old. What should I say? What if I do owe the money, or might owe the money – but it has been so long, right now, I don’t really know for sure. Thanks, Susan from Santa Maria.”

Who really is calling? Can they validate the debt

Former bill collector turned author Ed Lewis (www.collectionagencysecrets.com) hears this question daily. We have known him for more than 10 years, and he always stood out as being honest, and helpful, thereby earning a high 6-figure income in the process. Lewis believes that far too many bill collectors wind up hurting themselves financially by having a lousy attitude.

“Listening and being helpful is money in a collector’s pocket because they earn a percentage of what is collected. Over time, nice is better than nasty, and it’s the same for the people we call. If we call you, being a jerk isn’t in your best interest,” he believes. We agree.

“How you handle our phone call or letter can have a tremendous influence on so many things, from the debt just going away to settling it at a fraction of what might really be owed and having it deleted from your credit report.

“But you need to protect yourself. Who really is calling you? Are they legit? You need to validate the reason they are calling. You want to be sure they can prove to you that it is your debt, and that you actually owe the money,” he cautions.

Lewis outlined the information which you need to obtain, beginning with what collectors refer to as “a full validation of the debt.”

“You have an absolute right to copies of contracts with your signature, credit card statements, any type of itemized statement of the account showing where the balance originated from. But watch out for them sending you a forward balance statement.

“This shows the balance due, but not where it came from or where it was obtained. This is not a clean validation – it does not validate the debt. You are entitled to a detailed statement of all charges and where they originated. Do not accept anything less.

“Always get the collector’s name, the company name, their in-house reference number for the account they claim you owe, their phone number, their address and fax number. If this is not provided, you may be dealing with some form of identify theft.”

Why you should always dispute the debt

Lewis believes that it is “absolutely critical and at all times that you tell the caller, ‘I dispute the debt.'”

“But what if you feel that something really is owed?” we asked. “Isn’t this getting into the grey area of morality?” His answer made perfect sense and was reassuring.

“When you tell the caller that the debt is disputed, they are going to ask you to explain. Do not answer. You do not have to tell them a thing. Your response should be a polite, “I will reply in writing to you. Please do not call any more, but communicate with me in writing only.

“This will impress upon the collector that you know your rights, something like the old saying, ‘Locks keep honest people honest.’ By being polite, revealing that you are an educated consumer, this greatly increases the chances that the account will be resolved in a manner which will not damage your credit. Collectors are a bit afraid of consumers who know and insist upon their rights being respected, typically treating them much better.”

After you hang up

That phone call from the collector is just the first step in what can “turn what most people consider as an unpleasant situation into something which can actually help your credit report in very important ways,” Lewis told us. “But,” he added, “once you hang up, now the ball is in your court, and you need act.

“This means either sending a fax or certified letter to the collection agency which again states that the account is disputed, that you are requesting validation of the debt, and that, under federal law, this must be accomplished within approximately 30 days of their receipt of your request.

“If they cannot either validate the debt, or accomplish this within that time frame, they must report this as a disputed account, or request its deletion from the three credit bureaus. And you want to put that language in your letter as well,” he stressed.

So, you go through all of those steps and they do indeed validate the debt. It’s yours, all right, so, now what? We’ll have your credit report clean-up answer next time.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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