If every company manufactured and delivered their products and services perfectly all the time, the courts would be a very quiet and boring place to work. The reality however is that commercial disputes come in all flavors, colors, shapes, and sizes in which the sheer number of legal cases on an annual basis can keep courts backed up in some states for a couple of years.
Since disputes almost always lead to collection issues, allow me to take a moment to outline how you can help us collection professionals prepare to resolve a dispute so that we can minimize the need for costly, lengthy, and frustrating litigation.
Full Disclosure – When a claim is submitted to our office without any advanced warning of a dispute, we often lose a valuable opportunity to communicate effectively with the debtor in the first call. Prior to placing a claim, if the debtor has mentioned problems of quality, delivery, service, etc. (valid or not), informing us of those details will allow us to formulate the best way to frame the conversation. Conversely, when we don’t know there’s a dispute at the time a claim is placed and then hear it from the debtor, the clock has to stop while we take a lot of notes and then convey them to you for your verification. Subsequently, getting back in touch with the debtor to communicate your side of the story can often be a challenge.
All Necessary Docs – This falls along the same lines as full disclosure. Having the customer’s credit application, copies of contracts, purchase orders, emails, and any other documentation that will support the transaction will be the ammunition needed to counter any actual or perceived complaints. In addition, with a fresh set of eyes, we may notice some important tidbit of information that wasn’t noticeable before.
We’ve Heard It All – Not every dispute is due to quality, delivery, or other related transactional issue. Sometimes there could be a huge misunderstanding, a breach of trust, or a falling out. Unfortunately, we human beings will sometimes say things that can escalate into a war of words. Whatever the reason(s) that caused the relationship to fall into a state of estrangement, please let us know. The truth is, over the decades that we have serviced thousands and thousands of claims, we’ve seen and heard it all. Most likely, what you may think is embarrassing, won’t even make us flinch.
It’s Complicated – Some disputes can be very involved, especially when there are complaints against a product’s technical or compliance standards. When this happens, we recognize that as much as possible we need to learn about your company’s product to the extent that we can understand the point of the dispute. Many years ago one the claims submitted to us had to do with the compliance standards of hydraulic oil. The debtor claimed the oil that the creditor had shipped, which was under a different brand name, did not fulfill technical and compliance standards. Through our research we found the chemical formula for the oil and matched it to the hydraulic oil required for the debtor’s elevator system. This resulted in a very positive ending to a technically complicated dispute.
Give Us Guidelines – As much as we would like to always collect in full, life is full of compromises, especially when there’s a dispute. Anticipating that the debtor may very well dig in his heels, letting us know a settlement level that we can integrate into our negotiations will greatly facilitate reaching a resolution more quickly.
Although disputes will always be a part of doing business, the above guideline will greatly support resolving them as quickly and cost effectively as possible.
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This article was edited by Steven Gan.