August 2009

The most common reason for a debtor not repaying credit is because he/she cannot afford to repay it. Consequently, he or she may come up with a number of excuses to deny liability or delay payment.

In essence, an excuse can be defined as an individual’s emotional reaction to a problem which threatens him or her. During the process of debt collection it can sometimes prove to be difficult to distinguish between an excuse to avoid payment or a valid reason for defaulting where a debtor combines an excuse with false logic as presented in the following example:

“Mr Smith works for an insurance company and has a savings account with CASH BANK. He skipped a payment due on the 30th of each month. A debt collector phones him and his response is as follows: “I’m sorry, sir, but I work until five o’ clock everyday and when I get to the bank, it’s already closed, so I couldn’t get the money to pay you.”

In the above scenario, it may be a true that Mr. Smith works until five o’ clock everyday. It may also be a true that his bank closes before five o’ clock but the logic behind the excuse is false. There are still a range of other options available to Mr. Smith, such as ATM’s, visiting the bank on a Saturday morning, internet transfers or arranging a stop order with his bank to deduct and pay over the instalment on his behalf.

Consequently, it is important for you, as a debt collector, to recognize the facts and question the debtor accordingly.

Please find some other commonly used excuses below with the suggested way of dealing with each excuse:

“I have a cash flow problem”

You will have to obtain more information here as to what has caused the cash flow problem. You have to determine if this is a temporary problem which will be resolved quickly or whether it has the potential of affecting the recovery of the rest of the outstanding amount. Should the debtor be able to make additional payments in order to compensate for the skipped instalment, you should encourage a promise from the debtor to do so and record it on your company’s collections management system. However, should the problem be more serious and long-term, then it may be in the your best interest to arrange for the debtor to pay a lower instalment each month. If you are both the collector and the credit provider, then you may refer the debtor to a debt counsellor in terms of S129 of the NCA.

“The account has already been paid”

Should a debtor rely on this statement as an excuse to avoid or delay payment, the following questions should be asked by you:

“Into which bank account was the payment deposited?”

“On which day was payment deposited?”

“Can you fax me a copy of your deposit slip?”

“Can you fax me a copy of your bank statement as proof of a debit order deduction?”

If the debtor is not able to give sufficient proof that a payment was made, it is most likely an indication that he or she is playing for time. You then need to take further action. The necessary action may be the legal route but this will depend on how long the account has been in arrears.

“The cheque is in the post”

Should the debtor claim to have posted a cheque you may ask the following questions to ascertain whether there is any truth to the statement or whether it is simply a delaying tactic on the part of the debtor:

“What is the cheque number?”

“What was the value of the cheque?”

“Whom was it addressed to?”

“When was it posted?”

“Was it sent by regular or registered post?”

You should inform the debtor that he or she is still liable for the amount due until the cheque has been cleared by the respective bank. You may also request that the debtor furnish you with any supporting documentation and that the matter will be investigated.

If the debtor is not able to give sufficient proof that a cheque payment was made, it is again most likely an indication that he or she is playing for time. You then need to take further action. The necessary action may be the legal route but this will depend on how long the account has been in arrears.

“I’m too busy”

The debtor may argue that he or she is to busy at work and does not have the time to make the payment due.

“I’m sorry. I’m very busy and can’t talk now”

You, as a collector, should show appreciation for how busy the debtor is but also make it clear that it is your intention to resolve the matter as quickly as possible. Remind the debtor that it is in his or her best interest to resolve the matter sooner rather than later.

“I don’t have an account with you”

Another common excuse is for debtors to dispute their liability. Before going any further, you must be sure of his or her facts. In this case it might be better to draw the file and check for any indication of fraud and then call the debtor again. Documents should be checked for authenticity and signatures compared to see if they correspond with each other. Ask the debtor to come into your office and produce the file displaying his or her signature. If the debtor still denies liability, then legal action should be instituted immediately.

It is always important to react to an excuse with professionalism. This means that you must remain calm and in control of the conversation at all times. Always be assertive when dealing with debtors as you want them to realise the seriousness of not maintaining a regular payment profile. Be careful not to be too informal or overly friendly.   A debtor with a cash flow problem who is juggling a few creditors may more than often choose to pay those who are assertive and professional first before the rest.

We hope you have found the above information piece to be of value.

Should you wish to learn more about debt collection, Compuscan Academy offers a course in Effective Debt Collection under the NCA which covers effective debt collection practices, methods of collection, the debt counselling process and the litigation process.

For any further questions, comments or if you want to enrol for the above mentioned course you are welcome to contact us at   This e-mail address is being protected from spambots. You need JavaScript enabled to view it or contact us on Tel: 021 888 6000.