First and Third Party Debt Collection Services

First Party Debt Collection Services

Debt collection refers to the process of procuring the amount receivables from individuals or business entities, who fail to honor the indebted amount incurred in exchange for a good or service. It is an arduous task that is beyond the caliber of a layman. Hence professional agencies work on acquiring the amount to be paid from the indebted party in question. Debt recovery dubai is carried out by collection agencies. These entities are well versed in the art of collecting the owed amount. Therefore, they get professionally hired by the victimized clients to do the said bid.

Debt collection dubai is executed by different types of collection agencies. The selection of any one of these three categories is done by the client himself, depending upon his business operations and circumstances.  The three types include first-party collection agencies, third-party collection agencies, and debt buyers.

First-party collection agencies refer to the victimized company's internal department, designated to receive the amounts due from their clients. They comprise a group of employees who are assigned the task of collecting the money against the debt invoices. Generally, this is the least vigorous method of debt collection. The designated department makes less threatening attempts to collect the payments due. They are not a high-pressure putting force as compared to the other two types of collection agencies.

There may be several reasons behind this notion. Companies that opt for this process of debt recovery dubai intend to politely issue reminders or tactics to acquire the payments against the debt they originally issued. The motive behind such a docile method is to hang on to their clientele to generate future cash inflows. 

They opt for a less barbaric debt collection dubai scheme since they invested a considerable amount of time and effort in building up a strong customer bracket. They intend to maintain their customer profile instead of losing valuable future business transactions with them.

Such an agency waits for the stipulated time to pass way beyond the due date and then starts making attempts to collect the debt. Usually, they begin with sending payable amounts reminders to the clients by mail. If they fail to receive any positive response through this, then they switch over to the voice communication mode.

Third Party Debt Collection Services: 

The collection of arrears is not as a simple task as it might seem. Company owners face this complication quite frequently in their business life. Debt generation disturbs the normal cash flow system. The company has to invest a considerable amount of time and effort in collecting back the payments due from the clients. It is a task that involves a lot of hassle. The easiest way to avoid the nuisance is to hire agencies for debt collection in Dubai.

First-party collection agencies are opted for hiring when the lending company wants to collect debts while still maintaining goodwill with their customers. Their strategy is to uphold the public relations and any future probability of business opportunities that stems out of them. It strengthens the firm's reputation and word-of-mouth marketing in the commercial trade. Consequently, it helps them to get hold of a wider clientele bracket.

Third-party collection agencies, however, adopt a more aggressive approach to debt collection in dubai. Such agencies are not a subsidiary entity of the lending company. They are not linked or associated with the firm's business or debt contract in any way but get hired for the sole purpose of collecting back the loans due from the indebted clients. The company or original lending entity hands over the details regarding the amounts to be received to the hired collection agency. They are assigned the task of recovering back the debt amount and given a compensation fee in return.

However, this fee is based on a contingency plan.

A contingency-based fee refers to the fact that the collection agencies are not eligible to receive a full payment but a specific percentage of the debt payments they can collect back. This contingency fee plan makes them fearless of any consequences since they don't have a huge monetary benefit at stake. Hence, their approach to debt collection becomes more direct and fierce. Their goal is not to maintain a loyal customer bracket. Neither are they concerned about the company's PR issue. Their sole objective is to collect the debt payments by more forceful tracing attempts as compared to those adopted by the first-party agencies.