Debt Collector Job Description, Skills, and Salary
Get to know about the duties, responsibilities, qualifications, and skills requirements of a debt collector. Feel free to use our debt collector job description template to produce your own. We also provide you with information about the salary you can earn as a debt collector.
Who is a Debt Collector?
A debt collector is a professional who is tasked with the responsibility of contacting individuals regarding unpaid debts. Also known as account collectors, they work for the company owed the money or for a collection agency hired by the company to recover overdue funds.
Creditors are businesses that owe money, while debtors are individuals who owe these businesses money. If the creditor is unable to collect payment from the debtor via normal billing procedures, the creditor refers the customer’s account to a debt collector. Rather than maintaining an in-house collection department, the creditor may transfer the account to an independent, stand-alone company called a collection agency, which employs debt collectors. In either case, the debt collector contacts the debtor via telephone or mail to ascertain the reason for non-payment. When a debtor disputes a bill or expresses dissatisfaction with the goods or services provided, the collector may refer the debtor to the creditor’s customer service department for resolution. If the bill is determined to be reasonable or valid, it is the collector’s responsibility to follow up with the debtor to ensure payment.
When a debtor is willing to pay but is experiencing financial difficulties and is unable to pay the full amount owed, the debt collector may arrange for a payment plan. However, if the debtor continues to contest the amount owed and refuses to pay, the collector may refer the matter to an attorney for legal action. When an unpaid bill is for tangible property, such as a vehicle, the debt collector can supervise the repossession of the property. Additionally, the debt collector must search for the debtor if he or she is no longer at the listed address, tracing them through the use of forwarding addresses at the post office. Tracing work may also entail contacting a former employer and residential phone numbers to speak with former coworkers and neighbors about the debtor’s whereabouts.
A debt collector is educated in the art of persuading debtors to repay their debts. This is typically accomplished by contacting debtors via phone, but debt collectors frequently contact debtors via mail as well. They are typically trained to secure full payment, but may also be authorized to settle or arrange for payment. A debt collector may be employed by a single business to collect debts on its behalf. However, in some instances, he may work for a debt collection agency and collect money on behalf of a variety of businesses.
Typically, a debt collector contacts individuals who have fallen significantly behind on their bill payments. For instance, a person in this position is frequently tasked with contacting a customer who is at least a couple of weeks behind on a bill. However, the amount of time a business will wait before initiating collection efforts varies by business.
A debt collector typically contacts a debtor, informs him of the amount owed, and then requests full payment. If a debtor explains his or her payment difficulties, a debt collector will typically attempt to collect despite the debtor’s justifications. Often, a person in this position is trained to use persuasion to persuade a debtor to pay. He may inform the debtor that failure to pay will result in a negative credit report or legal action. He may also appeal to the debtor’s sense of responsibility for debt repayment or suggest alternative sources of funding.
Often, when a debtor is unable to pay in full, a debt collector is authorized to negotiate an agreement. For instance, he may be authorized to accept a reasonable monthly payment arrangement. Additionally, he may be authorized to make a settlement offer. For example, he may agree to accept 70% of the total bill if the debtor pays immediately. In this case, the remainder of the debt is typically discharged.
Typically, a debt collector will make an immediate attempt to collect payment. He may, for example, request that the debtor make a payment over the phone, using a check or a credit card. Often, debt collectors believe it is in their best interest to obtain some money upfront. This could be because some debtors will agree solely to get the debt collector to hang up.
If a debt collector’s initial collection efforts are unsuccessful, he or she may attempt again at a later date. This is dependent on the company’s policies. However, he may eventually turn over the account to an attorney, who may obtain a court judgment against the debtor.
Debt Collector Job Description
Below are the debt collector job description examples you can use to develop your resume or write a debt collector job description for your employee. Employers can also use it to sieve out job seekers when choosing candidates for interviews.
The duties and responsibilities of a debt collector include the following:
- Detecting deviations from predefined payment schedules.
- Contacting and emailing defaulters to remind them of their obligations.
- Detecting and apprehending fugitive defaulters via telephone and desktop investigations.
- Proposing reasonable, well-thought-out payment plans.
- Negotiating payment plans that have been adjusted.
- Monitoring defaulters’ repayments to avert future non-compliance.
- Keeping an up-to-date and exhaustive paper trail.
- Taking appropriate and timely legal action, if necessary.
- Collecting past-due debts from clients and meeting collection targets to maintain a positive cash flow.
- Maintaining a debtor’s book to ensure that debt information is current and accurate.
- Creating reports on receivables and days sales outstanding (DSO).
- Monitoring slow-moving accounts for delinquent debts and taking appropriate action to collect them.
- Providing prompt and accurate service to customers 24 hours a day.
- Conducting a review of the collection queue to ensure that collection activities are being performed appropriately.
- Adhering to the policies and procedures of the customer.
- Making contact with debtors and establish payment schedules and terms.
- Assisting the company in pursuing debtors through the provision of the necessary information.
- Securing and safeguarding the company’s and customers’ information.
- Attending educational programs to advance your career and develop your skills.
- Maintaining oversight of assigned accounts to identify delinquent debts
- Developing and implementing a strategy for recouping past-due payments
- Locating, contacting, and enquiring about the payment status of debtors
- Negotiating compensation in exchange for deadlines or payment plans
- Supervising, resolving, and responding to inquiries or complaints
- Adhering strictly to requirements when legal action is unavoidable
- Negotiating a settlement with the customer in which the customer pays a percentage of the debt to avoid collection
- Maintaining and updating collection records through the use of appropriate materials or software, such as Microsoft Office
- Tracking and locating debtors using the appropriate methods to initiate the recovery process.
- Attending educational programs to advance one’s career and develop one’s skills.
Other important tasks include the following:
- Communicating with Debtors
Debt collectors contact individuals, typically by telephone, to collect payments on delinquent accounts, either on behalf of the original creditor or a third-party debt collection agency. They frequently deal with debtors who avoid their phone calls, attempting to persuade them not to hang up when they realize the call is a collection attempt. Additionally, some customers are hostile or obnoxious when dealing with collection agencies.
- Arranging for Payments and Settlements
Debt collectors negotiate payments and settlements on their agency’s or business’s behalf. They collaborate with customers to develop, recommend, and implement payment plans that are manageable for the customer, thereby preventing the account from falling into delinquency again. Alternatively, debt collectors may negotiate a settlement with the customer in which the customer pays a percentage of the debt to avoid collection.
- Keep Records of Collections
Debt collectors maintain records of all customer communications, such as agreed-upon settlements and payment plans, as well as amounts paid over the phone. Numerous collection agencies utilize software to manage customer records, monitoring debts and payments; debt collectors ensure that records are entered and maintained accurately throughout the debt collection process to avoid legal or financial complications.
- Identify Debtors
Numerous debt collectors employ skip-tracing techniques to locate debtors and initiate the collection process. This may include searching public databases, obtaining credit reports, and contacting relatives and other individuals to update debtor information following the Fair Debt Collection Practices Act. Debt collectors conduct extensive research and process massive amounts of data to maintain current records of debtor addresses and phone numbers to aid in debt recovery efforts.
- Payments to Customers
Debt collectors may accept payments from customers via check or credit card. They apply payments to customer accounts and provide reports to accounts payable and legal departments, ensuring that debtor accounts reflect updated amounts and that payments are applied and recorded properly in internal systems.
Qualifications
- High school diploma
- It is ideal to possess a formally recognized finance qualification.
- Demonstrable track record of successful debt collection.
- Proficient in the use of current accounting software.
- Familiar with legal provisions governing debt.
Essential Skills
- Reading skills
As a debt collection agent, you will be required to read copious amounts of paperwork. Each case will require your complete comprehension to arrive at a solution. For example, you will be expected to understand legal procedures and their consequences and to be able to explain them to the debtor in plain language. Understanding the true factors that contribute to bankruptcy, commercial instruments, and government laws are critical for any debt collection agent. This article contains some helpful hints for successful preparation and documentation.
- Mathematical skills
Debt collection work is centered on numbers and financial reports. While you do not need to be a certified accountant, strong math skills and an understanding of finance, accounting, and financial reporting are required. Debt collection agencies provide their clients with periodic reports on the amounts recovered and the progress made in various cases. Being numerate is advantageous when creating statements and reports for your clients. Additionally, you will need to explain payments, financial terms, and credit services to debtors who may be unfamiliar with financial terminology. Ascertain that you have the necessary knowledge to not only comprehend numbers but also to explain them to your clients and their debtors in simple terms.
- Listening skills
Each debtor has a unique story. To persuade them to pay their debts, you must first understand their circumstances and current situation. When you first establish contact with them,
The likelihood is that they are currently embarrassed and hesitant to speak with you. Take the time to listen to them; demonstrate your concern for the situation they are in.
How to Become a Debt Collector
- Earn an undergraduate degree
While you can pursue a debt collector career with only a high school diploma, earning an undergraduate degree in a related field can help increase your chances of finding work and make your resume more visible to employers. A debt collector career frequently requires solid financial knowledge, business awareness, and strong computer skills. As a result, some of the most impactful degrees to pursue include those in business, communications, finance, and accounting.
However, even if you choose to pursue a degree in a single field, it can be beneficial to take classes in additional areas or subjects to add to your resume. For instance, if you choose to pursue a bachelor’s degree in finance, consider enrolling in classes in business law or computer programming to gain valuable experience in other areas of debt collection and to strengthen your occupational credentials.
- Conduct research into debt collection law.
Debt collectors will come across debt collection laws regularly throughout their careers. Acquainting yourself with significant debt collection laws and acts can assist you in performing your job duties more efficiently, navigating the legality of certain collection processes, and communicating with debtors.
- Acquire pertinent experience
Acquiring relevant experience is critical if you want to work as a debt collector because it can help you develop the necessary skills to perform your job duties and make you more visible to employers. Consider applying for internships at debt collection firms or jobs that will help you develop the skills and techniques necessary to work as a debt collector, such as information technology, research assistance, or customer service while pursuing an undergraduate degree.
- Obtain the necessary licenses
Each state may have different requirements or licenses for debt collectors. For instance, some states require that you obtain a collection agency bond before obtaining a debt collection license. Possessing a collection agency bond, also known as a debt collector bond, demonstrates to businesses that you have committed to following the rules and laws governing professional debt collectors. It serves as a testament to your professional knowledge of debt collection and an assurance that you will not commit theft, fraud, or otherwise violate your obligations.
To obtain an official debt collection license, you are frequently required to complete forms that request personal and financial information. Depending on the state’s requirements and the type of company for which you’re applying, the state may also require you to own or rent an office space or location. For instance, if you work for a large corporation or firm and do the majority of your work remotely, your employer may require you to rent an office space separate from your home to receive your license officially.
Where to Work as a Debt Collector
Debt collectors are frequently employed by debt collection agencies, but some work independently.
Debt Collector Salary Scale
In the United States, the national average salary for a debt collector is $32,252.