When you say the words “debt collector” to people, it’s not uncommon to get a slightly negative reaction. It’s not entirely surprising, as “debt collector” in many iconic movies and popular television shows is often code for “enforcer”.
But the Australian debt collection industry is about as far from the back streets of Chicago or the rougher parts of New York as you can get. A recently published report by the consumer watchdog, the Australian Competition and Consumer Commission (ACCC), reveals a number of facts about the industry in this country.
For well established industry participants like Challenge Collections, and those looking to work with debt collectors – maybe for the first time – the report makes for very interesting reading. We’ve summarised some of the key points below.
The Headline Amount
It’s a simple fact that individuals, small businesses, medium sized enterprises and large companies all work with a professional debt collector for one simple reason: to get results.
But reports like the one by the ACCC put specific numbers on this effectiveness. Specifically, the regulated and professional debt collection industry that Challenge is part of was responsible for over $2.2 billion worth of collections in the 2014 financial year alone.
That is a phenomenal amount, and shows that the industry is both well regulated and effective at what they do. At a more individual level, every unpaid debt that ends up back in the company bank account can make a huge difference to the end of year results of that business, and the livelihoods of those who work for it.
The Australian debt collection industry employs over 8,500 people to help businesses recover their unpaid amounts from debtors. They are highly motivated and well trained, in what can sometimes be a difficult and frustrating job.
Business Process Outsourcing
The report also speaks about the cost benefits that attach to engaging a professional debt collection company, rather than taking the “do it yourself” approach to debt collection.
This can seem counter-intuitive to many, as debt collection companies are paid for their services. However, the business process outsourcing argument goes that each business gets the most benefit by focussing on what they do best, and allowing others to do the same.
This allows the better businesses to serve more customers, faster, and for a lower cost. These cost savings can be passed on to customers, to win more market share. It also allows businesses to not lose out on attracting more business and new clients – because they are spending their time chasing debts.
This outsourcing model can also be described as a “win-win” approach, which allows all business to focus on what they do best.
The ACCC report also provides an indication of the highly evolved and strongly regulated legislative regime that has evolved in Australia to protect consumer rights for those working with the debt collection industry.
The Australian Consumer Law, the Competition and Consumer Act, the National Consumer Credit Protection Act, the National Credit Code, the Privacy Act and the Australian Privacy Principles all interact to create a strong legal safety net for consumers.
There are also various specific state based laws, including those in Queensland, that add an additional layer of protection.
So if you are one of the thousands of Australian businesses or individuals with unpaid debts, why not learn more about how the experienced team at Challenge Collections can help you recover your unpaid debts.
We invite you to phone us at your convenience on [phone number], or send us an email [link]. We focus on collecting your debts, so that you don’t have to.