Do you know the difference between consumer and commercial debt collection?
Are you struggling to collect a debt and looking to involve a professional? There are many different collection agencies and businesses to help you but picking the right one for your situation is vital. For instance, there’s an important difference between commercial and consumer debt collection.
Consumer debt collection
Private debt collection usually involves the invoices between a company and a consumer. This can include unpaid health insurance bills, rent or late mortgage payments. Usually, it’s debt collection agencies who specialise in collecting consumer claims.
There’s also a big difference between non-paying consumers and business debtors. In some cases, the non-paying consumers are vulnerable and/or have a problematic debt situation. Knowledge of this target group is important when going through the collection process.
Additionally, many countries have stricter debt collection rules for consumers than business or commercial debt collection. Consumers often have more protection because companies are expected to be better equipped for legal matters.
Consumer or commercial debt collection
Business debt collection involves unpaid invoices between two companies. Lack of payment on a business invoice usually has many more different reasons than a consumer invoice. For example, an unpaid invoice can come from a conflict about contractual agreements.
The business debt collection requires legal knowledge of business and business contracts. Moreover, it is often important for companies that the commercial relationship with a customer is maintained. In the debt collection branch, it is often collection lawyers who specialise in collecting business claims.
In most European countries, there is hardly any legislation in the field of business debt collection. Because companies are less vulnerable than consumers, there is less legal protection.
Consumer or business customer?
Considering that debt collection on private individuals requires a different approach than business debt collection, it is advisable to call in a specialist with knowledge of your debtor. For more information about collecting business debt, you can always contact our debt collection specialists. We are happy to help you with collecting your outstanding invoice.