Collection Methods

An Expert's View about Debt Collection in Turkey

Posted on: 27 Oct 2011

In our efforts to come to a pre-legal solution with debtor we employ several different techniques of persuasion. The first step is always the sending of a demand letter over registered post, fax, and email. Subsequently, when no reply comes after a maximum of 7 working days, we start contacting the debtor over the phone. If no solution reached within 5-6 weeks, via a final notification we will be compelled to inform debtor that his case will be brought legal, and enforcement procedures to be initiated by our affiliated law firm.

Demand Letters:
Sending of a demand letter is standard the first initiative we take. Although we have a standard format we do not use standard content. Every demand letter can be tailor-made and composed according to the specificities of each single case. We shortly introduce our collection agency, concisely provide a summary of the debt issue, and indicate what is requested from the debtor. Also, the first demand letter will inform the debtor on the full financial consequences of continued non-compliance

If a case is not successfully solved before the end of the first month, an official second demand letter will be send out. This time we outline the exact legal procedure and provide exact information on the financial implications of the 'enforcement proceedings'. A third and final official demand letter is only send out when a case has come to a point on which we have decided, in consultation with the creditor, to initiate enforcement proceedings. The debtor will be notified about the transfer and what they can expect from the legal process.

Collection Calls:

Collection calls are the most important phase of the pre-legal collection process. It is during these calls that we have direct contact with the debtor and approach him in his own mother tongue. The first step is always to try to reach through to any financial director or the person responsible to approve of payments. The most common hurdle are secretaries which have been instructed or are unable to redirect a call to the person in charge of payments. However, we have different methods to persuade secretaries as to why a call has to be put through.

When finally talking to the responsible person, we often receive surprised reactions. It is not unrare that they show relief to be able to finally talk in their own language. Most often we hear that a conflict situation has gotten out of hand or reached a deadlock due to language problems and total misunderstanding from both sides. The result had been frustration which had locked the issue, and caused both debtor and creditor not to talk to eachother at all anymore.

It is of key importance in Turkey to gain trust and to build up an informal relationship with the debtor. Therefore we let the debtor elaborate on the debt issue, showing understanding for the predicament he allegedly is in, and thereby create an informal bond and a feeling of trust. Subsequently, we inform the debtor that our goal is not solely to help our client, the creditor, to recover the overdue account, but also to do all we can to prevent legal proceedings. It is our experience that the latter is a very powerful persuasion technique which always brings the debtor to the negotiation table.

Within the six weeks before a case goes to Court, we gradually intensivate the calling of the debtor up on to a daily basis. This has proven to be ample time to arrange the settlement. In some complex cases which demand more time, we do schedule a meeting with the debtor in order to reach an agreement, often in the form of a payment schedule.

Final Notification:

When the debtor remains reluctant to settle with us before the passing of the first six weeks, we arrive at the final stage of the pre-legal procedure, the final notification letter. This letter is sent again both by official post and ove email, however with one sole difference, it is signed now by our law firm, and the debtor is informed that legal procedures are to be initiated upon continued defaulting within 7 days.

Posted: 27 October 2011
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Debt Collection In Turkey