Dealing with international debt collection agencies presents different challenges than debt collection services for those living within the United States.
Contacting and recovering debts from clients living domestically is already difficult. However, this process becomes even more convoluted if that person is from another country and crosses the border home.
It is important to note that like domestic collections, international debt recovery services have many of the same processes and goals. They both aim to recover money that was borrowed from a customer. The main difference is that international collections are after foreign clients, rather than those living in the country. When your client is in a different time zone and across the world, getting your money can be difficult and frustrating.
International clients represent even more concern than domestic ones. Exchange rates constantly change and getting into contact with the debtor can be much more difficult.
What is an international debt collection?
Again, international debt collection is very similar to domestic collections. All it entails is attempting to get a debtor to repay the money they owe. However, these customers are located in foreign countries. When a customer does not pay, it can cause cash flow problems within your business, among other things.
It is often smart to hire a debt collection agency that specializes in international collections. However, these services are often extremely expensive. Ensure you check their qualifications and credentials before hiring any third party.
How does it work?
Simply speaking, international collections follow the same basic process as domestic methods. These steps include:
- Follow up with the client: The first step is to communicate with the person or client that owes you money. It may be beneficial to bring up the possibility of legal action.
- Hire a debt collection agency: If the client is still avoiding the payment, hiring a collection agency can help. They can help you with communicating with the client and can help your company get their money back.
- Legal action: After hiring an agency, they may recommend taking legal action against the client.
- Legal ruling: If you move forward with legal action, court ruling will decide what happens. The debtor must adhere to any court rulings.
Important things to note
When hiring a debt collection agency, always check the credentials and experience of the company you want to hire. See their track record for dealing with international clients and even if they have had success in the specific region the client is located in.
In addition, before hiring an agency consider the following:
- If the money is only slightly overdue, try reaching out another time to get your money.
- Try threatening a late fee – in some cases, this is the only push they need.
- If the client is one of your most loyal or biggest customers, only hire a collection agency if absolutely necessary. Oftentimes hiring an agency can have dire consequences to the work relationship.
- Hiring a debt collections agency is extremely expensive.
International debt collection laws
There are no international laws authorizing and regulating international debt collections. Instead, the laws that must be followed are based on where the client is located. For example, if a client from France owes your U.S.-based company money, you must abide by French debt collection laws.
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