Sustainable debt collection – The future of customer-friendly arrears resolution

In today's economic and social context, sustainability is becoming increasingly important—not just for the environment, but also in business operations and customer relations. Within the debt collection sector, there is a growing demand for sustainable solutions that balance the interests of both creditors and debtors. In this blog, we explore what sustainable debt collection entails, why it is essential, and how Ultimoo integrates this approach into all its processes.

What is Sustainable Debt Collection?

Sustainable debt collection means that the collection process is not solely focused on recovering outstanding debts, but also on maintaining a positive relationship between the creditor and the debtor. It involves finding solutions that are beneficial to both parties in the long term. This can be achieved through tailored payment arrangements, empathetic communication, and avoiding legal action whenever possible. This prevents the debtor's financial situation from deteriorating further while ensuring the creditor receives their funds.

Why is Sustainable Debt Collection Important?

Sustainability in debt collection looks beyond short-term results. Here are several reasons why companies should opt for a sustainable approach:

• Customer Retention: By approaching the collection process in a friendly and professional manner, debtors are more likely to remain customers after their debt is resolved.
• Reputation: Companies that choose sustainable debt collection demonstrate Corporate Social Responsibility (CSR), contributing to a positive brand image. Amicable collection serves a significant social and economic purpose.
• Financial Health of Debtors: Sustainable collection helps debtors settle their debts without falling deeper into financial hardship. This reduces the risk of bankruptcies or long-term problematic debt.
• Laws and Regulations: Governments are imposing stricter requirements on how companies and agencies handle debt. A sustainable approach ensures compliance with regulations like the Wki (Debt Collection Quality Act).

How Does Ultimoo Implement Sustainable Debt Collection?

To implement sustainable collection, we have refined our processes with several key initiatives:

Human-Centric Approach
At Ultimoo, we have known for years that empathetic and customer-oriented communication leads to better results. This means approaching debtors with respect and understanding, emphasizing solutions rather than pressure and coercion.

Flexible Payment Options
Offering payment plans that align with the debtor's financial capacity is essential. This ranges from staggered payments to temporary suspensions, depending on the individual's situation.

Transparency and Communication
Transparency is crucial. Debtors must be fully informed about their outstanding debt and the potential consequences of non-payment. This is a core component of our Wki-compliant workflow.

Strategic Use of Technology
Technology plays a major role in sustainability. Using data-driven collection trajectories, we gain insight into payment behavior. We use AI and RPA (Robotic Process Automation) to automate routine communication, freeing up our specialists to focus on where it truly matters: personal contact with debtors.

Lowest Possible Costs
We strive for sustainable solutions at the lowest possible cost for both the debtor and the creditor. We offer various fee structures, from passing on collection costs to fixed rates per file, preventing debtors from falling further into financial trouble.

Collaboration with External Parties
In some cases, we collaborate with debt counselors or budget coaches to help debtors get their finances back on track, ensuring the creditor is paid while the debtor finds stability.

Positive Results

At Ultimoo, we have seen for years that this approach works, especially for high-impact claims like rent arrears and utility bills. By choosing a customer-friendly path, legal action is only used as a last resort. In the majority of cases, we establish contact and find a sustainable solution, leading to higher success rates without damaging the customer relationship.

Conclusion

Sustainable debt collection is about more than just numbers; it’s about business continuity and respect. As Arjan Stigter, Managing Director of Ultimoo, states: "By combining empathy and technology, we create a process that is not only effective but also respectful and future-proof."

Credit Expo 2024

On Thursday, November 7, Credit Expo 2024 will take place in 's-Hertogenbosch. As a Gold Partner, Ultimoo invites you to meet our team and attend our knowledge session: 'Save 40% time with AI and avoid the mistakes we encountered'.