In article one in this three piece series on the very basics of debt collection, I wrote about the differences between third party bill collectors and in house debt collectors. But no matter what entity or institution they work for, the jobs of collection agents are the same. First, they need to locate the people or businesses that owe the debt, and tell them that they are delinquent in their payments. Typically, bill collectors will reach a debtor over the phone, but they are known to send mail as well.

Those people who owe the cash are called debtors, or consumers, and at times they may move without leaving a forwarding address or appropriate phone number. Sometimes this is done on purpose to avoid being contacted by the debt collectors, other times this is just a mistake. In these cases, the collection agents may check with telephone companies, the post office, credit bureaus, and former neighbors to get the new address.

If a debt collector gets a hold of a debtor’s neighbor, they are strictly prohibited from telling that neighbor why they need the number, and are not allowed to reveal that the consumer owes a debt. The process of tracking down a debtor’s new address or phone number is called “skip tracing.” Collection agents will utilize computer systems to track when debtors or companies change their contact information on any of their open accounts automatically.

As soon as the bill collectors find the debtors they will contact them to let them know about overdue accounts and to ask for a payment. Collection agents typically call from 1-800 numbers and must verify that they are talking with you before they can proceed. If anyone else picks up the phone, they cannot inform them of your debt, all they can do is ask that you call them back at such and such number.

If a bill collector does get in contact with a debtor, and verifies that they are speaking with them, they will tell them their name, the details of their overdue accounts, and that this is an attempt to collect and anything discussed in this conversation may be utilized for the purposes of collection. To Be Continued In Part Three.

Mallory Megan works for Rapid Recovery Solution and writes articles on new york collection agencies. Free reprint avaialable from: The Very Basics Of Debt Collecting Part Two.

The Collections industry’s tactics may be taking a turn for the….better? In light of a number of recent lawsuits against debt collection agencies, ACA International, the largest trade group of professional creditors and collectors, says more and more collection companies are working towards training collectors to take a more empathetic position.

Empathy could just be the practice that can turn the industry around. Many consumers are being called by various collections agencies, and if they do get money, they aren’t going to want to give it to the aggressive threatening collector, they will give it to the person they can work with.

As agencies are working on training courses to include techniques on how to be gentler with people who owe money, a focus is being put on coaching, mentoring and counseling debtors, rather than aggressively threatening them. Collectors in training are encouraged to reflect on their personal experiences with collectors or someone that they know has dealt with them.

A recent trend in the industry has been to suggest that debtors talk to their parents or grandparents about taking out a loan against their life insurance policies or reverse mortgage against their house. Those who practice this technique allege that our grandparents remember the Great Depression. They may not want this generation to feel that kind of pain and may be more apt to take a loan against the life retirement account or the life insurance policy.

Collectors who adhere to this philosophy think that it is in actuality a positive thing. They claim that it doesn’t hurt anyone. If a person borrows against life insurance it might be preferable to borrowing against a 401(k) or a retirement plan. That is because the person will be counting on that money to live on.

Right or wrong, it would do the collections industry a large amount of good to reassess its situation, and look for new innovative ways to collect in a today’s recession.

Mallory Megan is employed by a debt collection agency. Also she writes stories on business and finance, consumer spending and collection agencies.