Psychology of a Delinquent Debtor

After reading Article #1 titled "Is Your Business Owed Money?" in my series of "Recover Your Business Profits" blog posts, your business should have concluded to use a third party which is a profit recovery company to free up those profits which are tied up in late past due accounts receivable.


After having discussed many other topics, it is very appropriate to revisit and re-stress the importance of recovery, which is really where all the money is, via early third party involvement and how this links to the psychology of a delinquent debtor.

Not paying a bill that is owed is really like stealing!

Hence, the following psychology-based observation or analogy can be made:

1) Before most people build up the courage to "steal," they go through a process of increasing tension that builds up to the moment of the act or decision.

2) After that, the anxiety trails off fairly quickly, usually accompanied by some form of internal explanation as to why the decision was right or justified known as rationalization.

The thief’s ambiguity is greatest just around the moment that they execute the behavior of hiding the unpaid for goods in their coat which is the theft (non-payment).

This is a compelling reason to not wait long after the act occurs (failure to pay on the due date) to try and coerce (internal collections attempts) the building up of a self-motivated guilt by reminding them of the inappropriateness of the act which might drive a rescinding of the behavior. This is like a friend saying, “Hey don’t do that! It’s not cool!”

However, the friend is not always with enough influence to alter the behavior. It may take someone of authority like a store employee or security officer (a collection agency or debt/profit recovery company) to say, “Put those goods back now!” to drive a modification of the behavior. In the end it is like a guardian angle sitting on the thief’s shoulder and just after the act occurs whispering in their ear these words, “Do not steal that. It is not correct to do so. Return the goods. There could be terrible repercussions by not doing so. Your reputation (credit rating) could be ruined.” then chances are they will return the stolen goods (pay) before walking out the door (becoming very delinquent).

Isn’t the real priority in the end to get the merchandise returned to the shelf (recovery)? Isn’t this more critical from a non-emotional business standpoint than hoping they are able to walk out the door just so you might be able to apprehend them in order to send them to jail (affect their credit rating) which is emotional versus logical?

Remember, after they walk out the front door of the store (fail to pay before 90 days late) with the stolen merchandise, the farther and farther away from the door they get (older the debt becomes) the less and less likely the store security and police are to catch them to recover the merchandise (collect). This is a direct corollary to the “aging debt decreasing chance of recovery curve”. If the thief gets so far away from the store’s front door that you lose site of them then you probably will never catch them (never recover your money)!

The moral of the story is: “Get a third party involved early and not late to help improve the chance of recovery!”


To inquire about how you can work with a profit recovery company that has an average 56% recovery rate in 40 days for accounts turned over before they exceed 90 days late and where the cost is a flat fee of @$10 per debtor account,

call us at:

818-710-0244


Series: "Recover Your Business Profits"
Article: #9 "The Psychology of a Delinquent Debtor"