Observe Etiquette With Defaulters

Never get to the wrong side of the defaulters without knowing it. All other skill sets may not help you if you donot observe etiquette.

The following basic etiquette is recomended for every field collector:

1. Listen carefully; do not interrupt because it may be construed as rude behaviour and lack of respect.

2. Do not eat smelly food if you have a meeting with your customers immediatly.

3. Do not use slang.

4. Do not speak loud; it can be intrusive and takes up other people's personal space.

5. Use right english ; do not shorten or abriviate in  your written communications including Emails.

6. Do not go overboard with perfume; scent cannot be overwhelming.

7. The best is to keep the mobile on silent or vibrate mode when you meet your defaulters.

8. Do not get too personal; maintain distance and decorum.

Code Of Ethics

Many companies use the phrases 'ethical code' and 'code of conduct' interchangeably but it may be useful to make a distinction. A code of ethics will start by setting out the values that underpin the code and will describe a company's obligation to its stakeholders. The code is publicly available and addressed to anyone with an interest in the company's activities and the way it does business. It will include details of how the company plans to implement its values and vision, as well as guidance to staff on ethical standards and how to achieve them.

However, a code of conduct is generally addressed to and intended for employees alone. It usually sets out restrictions on behavior, and will be far more compliance or rules focused than value or principle focused.

It is important that each employee understands and commits in writing to Code Of Ethics of the company. This must be included in the induction program and a signed copy of the Code may be part of the joining papers of any employee.

It should be simple, brief and clear like the one below

·         Show respect in the workplace; do not discriminate

·         Act with integrity in the marketplace

·         Ensure ethics in our business activities

·         Perform work responsibly for our shareholder

Also read: what Is Ethics?

When To Hire A Collection Agency And Why?

Elsewhere in the same blog, we have discussed the strategy for debt-collection. We have classified accounts based on delinquency and risk as below.

I High Delinquent – High Risk ( DPD > 89 & Delinquency rate > 66% )	II Low Delinquent – High Risk ( DPD < 90 & Delinquency rate > 66% )
III High Delinquent – Low Risk ( DPD > 89 & Delinquency rate < 67%)	IV Low Delinquent – Low Risk ( DPD < 90 & Delinquency rate < 67% )

We strongly recommend Quadrant III for Debt Collection Agency. Most likely, many accounts here will be high on intention and low on ability. Economics of these customers may have started deteriorating in the recent past. Collection should be possible and seeking the surrender of asset may be considered as next option. The interface with this customer will have to still be customer centric and communication both ways need to be managed better.

Most finance companies and banks realize that hiring a collection agency is always a good decision, but they may not realize that if you have delinquent accounts 90 days past due, hiring a collection agency becomes a must-do.

Debt collection agencies of any type have proven success rates that far succeed first party collection attempts unless you’re a large company with a collection agency as a subsidiary.

A collection agency will be even more suited to solve your collection problems because they will have familiarity with thorny issues such as local laws, customs and language barriers.

Collections are complicated and should be handled by professionals due to the strict laws. For example, collection by MFI is highly regulated in the state of Andhra Pradesh in India.

This is a job that should be turned over to a collection agency immediately so it can be handled skillfully and promptly. Your return will be much greater, your cash flow will improve because you don’t have to pay for their services until they collect, and your time will be freed up rather than trying to navigate different cultures, legal systems without a compass.

 A collection agency will employ more people who speak the local languages and understand local customs. They will also operate during the best hours for collections calls. In addition, they’ll be cognizant of local laws and law makers in a way you just can’t do.

The final and crucial advantage a collection agency has is the option of using local sources as  informers and investigators, at the least cost.

What Is Ethics?

The general meaning of ethics is as follows:

“rational, optimal and appropriate decision brought on the basis of common sense”. This does not exclude the possibility of destruction if it is necessary and if it does not take place as the result of intentional malice. If, for example, there is the threat of physical conflict and one has no other solution, it is acceptable to cause the necessary extent of injury, out of self-defense.

There are confusing views on ethics.

Being ethical is clearly not a matter of following one's feelings. A person following his or her feelings may recoil from doing what is right. In fact, feelings frequently deviate from what is ethical.

Being ethical is also not the same as following the law. The law often incorporates ethical standards to which most citizens subscribe. But laws, like feelings, can deviate from what is ethical.

Finally, being ethical is not the same as doing "whatever society accepts." In any society, most people accept standards that are, in fact, ethical. But standards of behavior in society can deviate from what is ethical. An entire society can become ethically corrupt. Was Nazi Germany right and ethical?

What, then, is ethics?

Ethics refers to well-founded standards of right and wrong that prescribe what humans ought to do, usually in terms of rights, obligations, benefits to society, fairness, or specific virtues of honesty, compassion, and loyalty.
And, ethical standards include standards relating to rights, such as the right to life, the right to freedom from injury, and the right to privacy.

Most importantly, they must be always supported by consistent and well-founded reasons.

Briefly, it is a set of principles of right conduct.

It is moral principles that govern a person's or group's behavior; it is the moral correctness of specified conduct.

Train Yourself To Achieve And Succeed

Napoleon Hill's 17 Principles of Personal Achievement

Whatever the mind can conceive and believe, the mind can achieve. - Napoleon Hill.

Lesson 1: Definiteness of Purpose
Definiteness of purpose is the starting point of all achievement. Without a purpose and a plan, people drift aimlessly through life.

Lesson 2: Mastermind Alliance
The Mastermind principle consists of an alliance of two or more minds working in perfect harmony for the attainment of a common definite objective. Success does not come without the cooperation of others.

Lesson 3: Applied Faith
Faith is a state of mind through which your aims, desires, plans and purposes may be translated into their physical or financial equivalent.

Lesson 4: Going the Extra Mile
Going the extra mile is the action of rendering more and better service than that for which you are presently paid. When you go the extra mile, the Law of Compensation comes into play.

Lesson 5: Pleasing Personality
Personality is the sum total of one’s mental, spiritual and physical traits and habits that distinguish one from all others. It is the factor that determines whether one is liked or disliked by others.

Lesson 6: Personal Initiative
Personal initiative is the power that inspires the completion of that which one begins. It is the power that starts all action. No person is free until he learns to do his own thinking and gains the courage to act on his own.

Lesson 7: Positive Mental Attitude
Positive mental attitude is the right mental attitude in all circumstances. Success attracts more success while failure attracts more failure.

Lesson 8: Enthusiasm
Enthusiasm is faith in action. It is the intense emotion known as burning desire. It comes from within, although it radiates outwardly in the expression of one’s voice and countenance.

Lesson 9: Self-Discipline
Self-discipline begins with the mastery of thought. If you do not control your thoughts, you cannot control your needs. Self-discipline calls for a balancing of the emotions of your heart with the reasoning faculty of your head.

Lesson 10: Accurate Thinking
The power of thought is the most dangerous or the most beneficial power available to man, depending on how it is used.

Lesson 11: Controlled Attention
Controlled attention leads to mastery in any type of human endeavor, because it enables one to focus the powers of his mind upon the attainment of a definite objective and to keep it so directed at will.

Lesson 12: Teamwork
Teamwork is harmonious cooperation that is willing, voluntary and free. Whenever the spirit of teamwork is the dominating influence in business or industry, success is inevitable. Harmonious cooperation is a priceless asset that you can acquire in proportion to your giving.

Lesson 13: Adversity & Defeat
Individual success usually is in exact proportion of the scope of the defeat the individual has experienced and mastered. Many so-called failures represent only a temporary defeat that may prove to be a blessing in disguise.

Lesson 14: Creative Vision
Creative vision is developed by the free and fearless use of one’s imagination. It is not a miraculous quality with which one is gifted or is not gifted at birth.

Lesson 15: Health
Sound health begins with a sound health consciousness, just as financial success begins with a prosperity consciousness.

Lesson 16: Budgeting Time & Money
Time and money are precious resources, and few people striving for success ever believe they possess either one in excess.

Lesson 17: Habits
Developing and establishing positive habits leads to peace of mind, health and financial security. You are where you are because of your established habits and thoughts and deeds.

Do Not Be Sallian

Anybody born in India would and must know epic -Mahabharata; it offers lessons on life style and provides solution to any human problem.

Who was Sallian ( Shalya) in Mahabharata?

He was a brother of Maadri. Maadri was the second wife of king Panda. Consequently, he was a maternal uncle of the last two Pandavas - Nakula and Sahadeva;

He was a very good charioteer treated on par with Lord Krishna, but had to fight against Pandavas due to the trick played by Duryodhana. He subjected himself to the hospitality of Duryodhana who headed enemy Kauravas.

Sallian heard that Paandav's Agnathavas was over, and therefore in a happy mood started towards Upaplavya Nagar to see Yudhishthir. Duryodhana heard this and tricked Sallian. He made Sallian's journey as comfortable as possible. He did not allow him to camp on his own anywhere on the way. Duryodhana made all the arrangements of his staying. Sallian was very pleased with the arrangements. He actually thought that these arrangements were made by Yudhishthir, as he never saw the host. He told the servants that he was very happy with the arrangement and he wanted to see his host. He wanted to give reward to him for this. The servants went to Duryodhana and told this to him.
Duryodhan came and greeted Sallian. Sallian was surprised to see him instead of Yudhishthir, but he had already promised to give him reward, so he said to Duryodhan - "I was going to see Yudhishthir on his invitation, but you have won my heart, so ask for its reward." Duryodhan asked him to be the charioteer for Karna. Sallian had to agree.

Sallian went on to take  over the leadership of the Kaurava army on the eighteenth and last day of the great battle after the death of Karna; he was killed by Yudhishthir with a spear.

Lessons for debt-collection

The trick by Duryodhana was nothing but bribing. Many High Risk High Delinquent(HRHD) borrowers are like Duryodhana; they try their level best to trick/ bribe the collectors.

Anything beyond Water, Coffee, Tea and Cool Drinks offered by any borrower must not be accepted by collectors; if borrowers insist on having some, collectors must either refuse politely or ensure to pay for all.  Else, debt-collectors would be required to be grateful to borrowers like Sallian instead to his employer and be on the wrong side.

I came across many such sallians in financial services industry; I would like to share about a branch manager who had accepted dry fruits and some monetary help from a second-hand vehicle broker when his wife was found to have been suffering from cancer. The manager was obviously not in the right mood. The broker used the opportunity to trick the manager to approve loans and sign agreements without verification of the vehicle and based on fraudulent collaterals. The manager thought that it helped his sales numbers. I was not sure if there was any malafide intention by the manager. But, he was feeling like a sallian; he tried to cover the broker during investigations.

So, do not be a Sallian.  And live with self-respect.