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Credit and Collection

Procedures
Collections and Repayments

At the end of the lesson, the student is expected to:

 Discuss the tools and aids in collection

 Describe the strategies and tactics of collection
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Collections and Repayments

Collection Program
strategies, organization and procedures for
recovery of receivables

To reduce the amount of bad debt losses

while controlling collection costs

To reduce the company’s investment in

accounts receivable
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Collections and Repayments

Forces of Collection

Attorneys
House Collection
Salesmen (Legal Government
Collectors Agency
Counsel)
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Collections and Repayments

Unfair ???
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Collections and Repayments

BSP Circular 454 Series of 2004

Unfair Collection Practices

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Collections and Repayments

 Use or threat of violence or other criminal means to harm the person physically, his/her
reputation, or property;
 Disclosing the names of persons who refuse to pay for past due accounts;
 Use of profane language, insult, or obscenities to intimidate you or put you to shame;
 Informing family, friends, or colleagues that you are in debt;
 Employment of threat that a legal action will be taken in case of non-payment;
 Contacting the person during unreasonable hours (before 6am and after 10pm) EXCEPT
when the account is past due for more than 60 days or you agreed to be contacted at
anytime;
 Communicating or threat to communicate to a person a credit information, which is
known to be false; 
 Use of false representation or deceptive means in order to collect or attempt to collect
debt or information about the cardholder. 
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Collections and Repayments

SEC Memorandum Circular 18 s. 2019

Prohibition on Unfair Debt Collection Practices

of Financing Companies and Lending Companies
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Collections and Repayments

Education Persuasion

Problem Solving
Coercion
Assistance

Basic Collection Approaches

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Collections and Repayments

???
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Collections and Repayments

???
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Collections and Repayments

Preliminary Stage

Stages Reminder Stage

of
Collection Follow-up Stage

Drastic Stage
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Collections and Repayments

Statement
of Account

Notice or
SMS Reminder
TOOLS AND
AIDS IN
COLLECTING

Telephone Letters

Third Party
Letters
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Collections and Repayments

???
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Collections and Repayments

The Up-to-Date

The Changed Circumstance

General
Types of The Occasional Delinquent
Debtors
The Habitual Delinquent

The Premeditated Delinquent

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Collections and Repayments

???
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Collections and Repayments

???
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Collections and Repayments

 The Negligent
Types of  The Honest But Confused
 The Can’t Be Bothered
 The Seasonal Delinquent
 The Honest Late Payer
 The Chronically Slow
 The Wittingly Late
 The Stretcher
 The Tightrope Walker

Debtors 

The Braggart
The Vanishing Debtor