Handling Objections in Debt Collection: Strategies and Practical Scripts
Debt collection is a sensitive process that requires clear communication and patience when debtors raise objections. Here are some general strategies for handling objections in debt collection:
- Understand the debtor's objection
Listen to the debtor's concern and clarify any misunderstanding. For example, if the debtor questions charged fees, explain the fee structure clearly.
- Be empathetic
Debt collectors should acknowledge the debtor's situation and try to agree on a solution that works for both parties. For example, if the debtor cannot pay, discuss a payment plan they can afford or, if they are in difficulty, refer them to free debt advice.
- Offer specific solutions
Provide clear next steps and suggest alternative payment channels. For example, suggest specific payment methods that the debtor may find more convenient.
- Check the debtor's information
In some cases, the debtor may object to paying because they claim they did not apply for the loan in question.
Pause collection on the account, record the claim and refer it to the fraud team to check the application. Do not seek payment while the check is under way. If the debt is disputed in writing, collection must stop until the debt collector obtains verification of the debt under 15 U.S.C. 1692g(b). Resume collection only once the debt is verified.
- Explain the reason for the calls
If a debtor objects to repeated calls, the debt collector should explain the reason for the calls and agree on a specific payment time to help avoid repeat calls.
Examples of practical scripts that debt collectors could use when handling objections include:
- Providing a clear explanation of fee structures and stressing the importance of repaying the debt as soon as possible.
"I understand that you have concerns about the fees.
Let me explain the specific rules for fee collection so you can avoid unnecessary charges or penalties.
It's important to repay the debt as soon as possible to avoid negative consequences.
Can we discuss a payment plan that works for you?" - Offering arrangements the customer can afford, rather than suggesting they borrow, in line with FCA Handbook CONC 7.3.10R.
"I understand that repaying the debt can be difficult.
Let's discuss a payment plan based on what you can afford. If you are in financial difficulty, I can also refer you to free debt advice.
What payment amount would work for you?" - Explaining only consequences that are real and intended under the lender's policy, and offering a plan the customer can afford.
"I can explain the consequences that apply to your account under our policy. Let's discuss a payment plan based on what you can afford."
- Offering specific payment channels, explaining the reason for calls, and agreeing on a specific payment time to avoid repeat calls.
"To make this process as convenient as possible for you, we offer a range of payment channels, such as online payments and mobile apps.
Let's discuss which payment option works best for you.
Also, to avoid further calls, let's set a specific payment time that works for you.
Can you make the payment today or tomorrow?" - Being patient and persistent when following up with debtors who are behind on payments, and stressing the importance of repaying the debt as soon as possible to avoid negative consequences.
"I understand that repaying the debt can be difficult, but it's important to do it as soon as possible to avoid negative consequences.
Let's work together to find a payment plan that works for you.
Can we discuss a payment plan that you feel comfortable with?
Also, I'll follow up with you in a few days to check the payment status. Is that okay with you?"
By using these strategies and scripts, debt collectors can handle objections more effectively and improve the chances of collecting debt successfully.
It is important for debt collectors to remain professional and respectful throughout the process, and to work with debtors to find solutions that are fair to both sides.
Collection rules differ by country, so lenders should check their scripts against the rules where they lend, including the FCA's CONC 7.3 and the US Fair Debt Collection Practices Act.
With patience and persistence, debt collectors can help debtors repay their debts and avoid negative consequences such as penalties and negative credit records.
Frequently asked questions
What should a collector do when a borrower says the loan is not theirs?
Pause the payment discussion and route the account for a factual review under your dispute process and applicable requirements. Check the application, disbursement details and contact information, and confirm the borrower’s identity before sharing sensitive account details. Record what the borrower disputes and what evidence the review needs, then give a clear timeframe for the next update.
How should a collector respond when a borrower challenges fees?
Provide an itemized balance that separates principal, interest and each fee, with the dates and basis for the charges. Check the account records against the loan terms before asking the borrower to pay. If a charge is incorrect, correct the balance first. A rushed explanation can turn a fixable account question into a broader dispute.
What payment amount should a collector offer to a borrower in financial difficulty?
Ask what amount and date the borrower can manage after essential expenses, then offer options your policy allows. A smaller scheduled payment the borrower can keep is generally more useful than pressing for a large payment that is likely to fail. Confirm the amount, dates and payment method, and explain what happens if the borrower’s circumstances change.
When should a collector contact a borrower again after discussing a payment?
Agree on a specific follow-up time and channel, then record the borrower’s preference and any payment commitment. If the borrower promises to pay on Friday, follow up after that agreed time if the payment has not arrived. When no time is agreed, use your approved contact cadence and applicable requirements rather than repeatedly calling to seek an immediate answer.
How can a collections team test whether objection scripts are working?
Pilot one script change at a time for a defined objection, such as a fee challenge or a claim that the loan is unfamiliar. Compare payment commitments kept, repeat contacts, complaints and resolved disputes, not just immediate payments. Review a sample of conversations for clarity and respectful treatment, and stop or revise wording if it increases confusion or complaints.
