Sept. 26, 2013
Reykjavik, Iceland (debitum.biz) — debitum.biz recently caught up with Colombian bill collector Diego Arboleda and put some questions to him about the personal and professional sides of the trade.
Arboleda holds a degree in political science with emphasis on business administration from Los Andes University, Bogotá, Colombia, and is currently the president of Interia Cartera Empresarial S.A.S. He has been active in the collection industry for over twenty years.
DEBITUM.BIZ: So, Mr. Arboleda, how did you end up in debt collection?
ARBOLEDA: Well … it was a natural extension to the business credit reporting services we were providing at the time. We knew how sound credit decisions do not guarantee payment and how ensuing credit management and debt recovery efforts can make a huge difference in the end result. With this in mind, we decided to support our clients with quality collection and recovery services.
DEBITUM.BIZ: What would you say are the three most important qualities for a successful debt collector?
ARBOLEDA: That’s a good question. In my experience, I would say good listening skills, persistence, and creativity are absolutely vital if a collector is going to be effective and ultimately successful.
DEBITUM.BIZ: Can you say a few words about how your family and friends view your job?
ARBOLEDA: Sure, that’s easy. Like most people, they simply don’t understand it!
DEBITUM.BIZ: Tell us why you like your job?
ARBOLEDA: Results depend very much on doing things correctly. If the job is done well, recovery probabilities are much higher; if efforts are sloppy and disorderly, the chances of recovery are very poor. There is something deeply gratifying, therefore, about doing the job well.
Furthermore, there is always room for improvement and coming up with new ways of doing things. I simply love innovation, generating new ideas, and developing new procedures and strategies, always of course with more efficiency and quality.
DEBITUM.BIZ: What role do you see credit playing in your clients’ businesses?
ARBOLEDA: As professional service providers in the commercial credit collection industry, we see credit as part of our client’s marketing mix. Our clients see credit as part of their competitive advantage, or at least as a means of remaining competitive. Many do not manage their credit function as professionally as they should though, so we see ourselves as supporting their business processes for optimum performance and return.
DEBITUM.BIZ: How would you define a debtor?
ARBOLEDA: Like creditors, debtors vary from case to case, but generally I would say a debtor is someone who stands in a negative relation to their finances. I would even go so far as to say that being overdue in debt is fundamentally a question of attitude—namely, a negative attitude to a difficult financial situation. When we contact a debtor, for instance, we work on their attitude even as we undertake specific collection procedures.
DEBITUM.BIZ: Can you describe your job in a few sentences?
ARBOLEDA: A tough one. We see ourselves as an extension of our clients’ credit and collection departments. In other words, we operate in partnership with them with the aim of preventing current accounts from becoming past due, recovering past due accounts, and reducing write-offs to a minimum.
DEBITUM.BIZ: What would you say has been the most striking debt collection story that you have come across in your time as a debt collector?
ARBOLEDA: Well there have been many claims that have, in hindsight, become interesting stories, but probably the most striking one for me can be found right on our own company’s doorstep.
Interia started up in the year 1985 as a division of the leading business credit information services company in Colombia. But because the division was not a part of the company’s core business, it could never really fully develop to its potential. Prior to the sale of the information business to a credit bureau, the collections division was carved out and made into an independent company with the same shareholders and the same employees in collections.
But the new company faced many challenging situations as suddenly it had to stand on its own feet, with considerable overhead, significant loss, recoveries well below expectations, and commercial efforts coming up short. We even considered liquidation and were forced to downsize by letting non-essential personnel go and doing away with superfluous functions. Management also took the policy of not trying to acquire any new clients until recoveries and services were up to industry standards. Our focus was placed squarely on adjusting our business and collection processes and developing relations to existing clients.
And since then? Well, I am happy to report that operational statistics on recoveries for 2012 doubled from the previous year, and 2013 has seen record figures in our operational accounts. Such outstanding results illustrate the dramatic difference between then and now and also testify to the soundness of our collection processes.
Needless to say, clients, employees, and shareholders are very happy we stayed the course. So what is the moral of the story? Well, I think it’s that collection efforts need to be scrupulously attended to and that operating a credit department as a mere necessity, without giving it the importance it requires, is a recipe for failure. Focus, persistence, and creativity need to take centre stage if a collection enterprise is going to be successful.
DEBITUM.BIZ: What do you consider to be the most challenging issues for Colombian debt collectors in 2014?
ARBOLEDA: Okay. The first thing one has to realize is that our economy is subject to frequent and volatile fluctuations. This in turn gives rise to bad debt. The big challenges here are the lack of information and excessive consumer protection, both of which help bad debtors avoid contact with their creditors and evade creditors’ collection efforts.
Another challenge for Colombian collectors is of course the legal system in the country. I think it is safe to say that the system here is somewhat of a farce and as such has become pretty much a non-option for equitable debt settlement.
DEBITUM.BIZ: What laws does your country need to introduce in order to improve the situation of creditors?
ARBOLEDA: I would give my full-throated support to regulations similar to those found in the EU—those that punish past due debt and support creditors. That said, I don’t think such regulations will be implemented here any time soon.
DEBITUM.BIZ: How do you think changes in interest rates influence debtors’ behaviour?
ARBOLEDA: The most obvious thing to say here is that low rates encourage debt and that cheap debt can easily go awry if rates shoot up again. Furthermore, negative credit information can only be maintained during the period before a limitation becomes active. Debtors benefit therefore from shorter periods of debtorship as they can get a fresh start after the time limit expires. More often than not, a chronically bad debtor uses this to his, her, or its advantage.
DEBITUM.BIZ: We are coming to the end of our questions now. Just a few more. Can you tell us how computerization has influenced your company?
ARBOLEDA: Yes, of course. Computerization has provided for much better controls, follow-up, and overall efficiency through standardization. As a tool in the business credit collection industry, however, a computer has its limitations, especially when it comes to crafting a personalized approach to every creditor and every debtor. What is required here are soft skills such as those I mentioned earlier: listening skills, persistence, and creativity.
DEBITUM.BIZ: Is it easy for you to find employees with the right profile for debt collection?
ARBOLEDA: It certainly is not. Good collectors are few and far between.
DEBITUM.BIZ: And now for the last question. When are field agents normally sent out for on-site visits in Colombia?
ARBOLEDA: This varies from case to case, but generally visits are normally undertaken when debtors are clearly evading contact or when we don’t have sufficient contact information on the debtor.
DEBITUM.BIZ: Well, that’ll be all for now. Thank you very much for your time and your illuminating answers. I’m sure our readers have a much better insight now into the life of a Colombian bill collector.
ARBOLEDA: You’re most welcome. My pleasure.