I had a comment left on my post The Faces of Debt Collection where someone asked me to write a post about the cultural differences in debt collection. I have only done debt collection within the USA and so I asked the members of my Credit & Collections Association for information since I have members from all over the world as part of my group.
Here is what I have found out, if anyone has any other information, please post your comment below!
In most countries such as Latin America there are no regulations on debt collections. In Mexico, for example there are two kinds of debt collections, the professional companies that are registered in the national association of professional collectors and the black market. There is something called the "Shark Technique" that is used where the collector visits the debtor's home or hangs around until they are home and then they prepare a "theater like drama" where they have people they use to play the lawyer, judge and maybe an eviction officer, this of course is not real and is all an act but the debtor who does not know about this tactic or what the laws are, if there are any, can be scared into paying.
I also heard about a case in Columbia where a large debt collection agency was not making or improving their ratios for collectioins in a specific small town. A manager from this debt collection agency visits the town, and opens a module or small office in the down town square in order to receive payments, but doesn't have any luck. This particular module was situated in front of a catholic church and the manager visited the priest at the church and explained to him that he was the manager of the debt collection company, and he is sad because his plan was to make a donation to the church when he was succesful so that the church could finish its remodeling project. The manager went on to explain that there are to many people in this town that are not paying them. Therefore they could not make their donation.
Incredibly the next Sunday the priest explains from his pulpit that it is a sin to be a debtor and magically the people of this small town, started to pay. It sounds incredulous but it is true.
I would say the main differences in debt collection would be:
- Cultural
- Financial culture
- Education
- Lack of regulations
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