Feb. 1, 2014
Reykjavik, Iceland (debitum.biz) — China may be touted by many as the leviathan of the East and the workhorse of the global economy, but president and CEO of Inter-Credit Risk Management Ltd. Jeff Li says that the year ahead doesn’t look too bright either for the Chinese economy or the Chinese debt collection industry.
In his interview, Li also delivers an interesting account of the conceptions and misconceptions of the debt collecting profession in China. A recipient of a literature and law degree from the China Ocean University in Quingdao, Li founded Inter-Credit Risk Management Ltd. in 1997 and has been its president and CEO ever since. He is a member of the Finance, Credit and International Business association as well as the Committee of the First China International Forum of Commercial Debt Collection. In 2013, Li was elected to join the board of directors of TCM Group International.
DEBITUM.BIZ: How did you end up in debt collection?
LI: As a university student, I actually had no idea about the debt collection industry.My major was in law and so my thoughts were naturally focused on becoming a lawyer. After graduation, I got the chance to work for Inter-Credit and it turns out that this job has been better than anything I could ever have imagined as a law student.
DEBITUM.BIZ: What would you say are the three most important qualities for a debt collector?
LI: Being prudent, aggressive, and dedicated.
DEBITUM.BIZ: How do your family and friends view your job?
LI: In China, the majority of the people do not know very much about debt collection. There is a common misconception of the profession as associated with criminal behaviour and violence. In fact, most people do not understand that we always act in amicable ways—for example, through negotiating settlements. Fortunately, my family and friends understand my job very well and they fully support me.
DEBITUM.BIZ: Why do you like your job?
LI: My job is full of challenges. Every day you talk with different people and you have to persuade them to follow the rules established by law and through the industry. Working in debt collection is a great exercise for your brain.
DEBITUM.BIZ: How do you regard creditors and debtors?
LI: Since most collection cases are commercial ones, sometimes the reason for non-payment is due to a dispute. Therefore, though we always treat creditors as our clients and do our utmost to protect their interests, we are generally not too severe on the debtor, unless of course we can confirm that he/she/it is really a ‘deadbeat’.
DEBITUM.BIZ: What would you say are the three most important aspects of your job?
LI: The job of a debt collector is to
- protect the legal rights and interests of the creditor;
- trace debtors who fail to fulfil their payment obligations; and
- maintain cooperative relationships between creditors and debtors in the case of a misunderstanding or dispute.
DEBITUM.BIZ: What has been the most striking debt collection story in your experience?
LI: Recently, we handled a case against an insurance company in Hong Kong that was referred to us by a recruiting company. After negotiations, we finally managed to get the full amount paid within 50 days, which was over $100,000.
DEBITUM.BIZ: What would you say is the most challenging issue facing the Chinese debt collection industry in the year ahead?
LI: The economic environment in China does not look too bright this year. Many enterprises are currently experiencing financial difficulties, which makes it all the more difficult for us to collect payments. As part of China’s efforts to build its own credit system, the government has recently implemented new regulations on credit reporting. We believe it will benefit our debt collection work if we become the registered credit reporting agency for the Central Bank of China.
DEBITUM.BIZ: What areas of the law does China need to improve in order to ameliorate the situation of Chinese creditors?
LI: Improvements need to be made in civil law, contract law, company law, and other laws related to the rights of creditors.
DEBITUM.BIZ: How do fluctuating interest rates influence debtors’ behaviour?
LI: Normally, if interest rates go down, more people prefer to repay the money as soon as possible; if interest rates go up, then they show less willingness to pay.
DEBITUM.BIZ: How has computerization influenced your company?
LI: Ten years ago, we mostly used telephone and fax to collect debt; nowadays however, we have our own debt collection system and use email and online chatting programmes to collect debt. Computerization has also made it easier for us to trace debtors via the Internet.
DEBITUM.BIZ: Is it easy for you to find employees with the right profile for debt collection?
LI: It is easy to find an individual with the right profile, but it takes time to train a collector to the high standards we expect from our agents. He or she should be an expert in law, accounting, international trading, psychology, and many other areas related to the case in hand.
DEBITUM.BIZ: How do on-site debtor visits work in your country?
LI: China is simply too big for agents to visit each and every debtor. Even if we could visit every debtor, we would still have to be cautious because the debtor may report us to the police if we lack POA or supporting documents or if there is a dispute. That said, as long as the documentation is in order and the debtor’s location is reasonably close to one of our offices, on-site debtor visits do not present a major problem. As of 2014, Inter-Credit has more than twenty branch offices across the country and can offer an on-site visit service to most locations in the country’s provinces.