Here are the most frequent questions we get asked, perhaps you cand find your answer here, if not, please contact us and we will help you with all the information you need.
What is a debt buyer?
A debt buyer is a company, sometimes referred to as a collection agency, that purchases delinquent or charged-off debts from a creditor for a percentage of the face value of the debt.
How many debt buyers are on the DSB Advisory panel?
22 in Australia and 8 in New Zealand
Brand risk, how is your brand protected?
In every debt sale, the number one priority for all credit issuers is Brand Protection – ensuring that as a result of this debt sale, no adverse publicity will come back to them.
One of the benefits of employing a broker is ensuring as many aspects of the sale are covered to ensure everything within the organisations control won’t lead to expensive adverse media and potential litigation.
- Debt Buyers have to have an Australian Credit License, which is managed by ASIC and are required to follow compliance protocols on an annual basis to ensure their license is valid.
DSB ensures that the purchasing agents have experience in collecting in your industry and understand the risks when submitting a bid. An agent who is coerced into bidding higher as a result of misleading information or inexperience are more than likely to pursue debts harder and/or will challenge the credit issuer legally for misrepresentation.
DSB removes all Stat Barred and accounts with < 6 months until Statute of Limitations to eliminate the risk of ensuring debts not legally enforceable are not collected.
Some debt buyers are publicly listed companies whose shareholders depend on their brand to keep their investment secure.
Major buyers in the industry collectively have over 5000 employees between them who depend on their brands to keep their employees and grow their business
All debt buyers must be a member of a Financial Services Ombudsman and have correct dispute and hardship resolution policies.
The Australian Collectors and Debt Buyers Association report (www.acdba.com.au) reports that debt buyers logged 2548 complaints out of 27.6 million contacts made from 3.2 million accounts. The complaint / incident rates work out to be 0.009% of total contacts p.a.
Australian Blue Chip companies run debt sales on a regular basis and there are no known serious misconducts found that has affected their brands from a debt sale.
- Major banks and financial institutions conduct regular debt sales as part of their recoveries strategy and there has been no known recent adverse publicity.
Do debt buyers send out heavies to collect debts?
No, they are professionally run organisations where a number of them are listed in their local stock exchange. Debt collection is usually conducted over the phone where skilled debt collectors attempt to understand a debtors financial position and try and negotiate a successful outcome for all parties.
How much can I get for my debt?
Each debt portfolio from different industries will have their own individual valuation. The key for any buyer and seller is ensuring expectations are set early. Older, inventory based debt books wouldn’t expect to sell for much more than 2c-10c whereas a payer book would sell for a lot more.
What’s the oldest debt a debt buyer will buy?
Generally debt buyers would prefer at least 6 months until statute of limitations (6 years after acknowledgement of debt)
What is the minimum debt amount you can sell?
Due to bureau rules not allowing default listings for debts under A$150 or NZ$100, DSB have set these amounts as the minimum balances to be sold
What is the smallest debt book DSB would sell?
DSB generally won’t sell a debt book with a total face value of <$500,000 however our average debt book sales are approximately $2,000,000.