By Octávio Aronis, Attorney
A strong export economy is like a very dynamic manufacturing assembly line, in which thousands of parts are required to complete the final product. And among all the parts assembled, the one lubricating factor to keep the line from coming to a complete halt is having sufficient cash flow. As an international collection attorney, I often feel a sense of pride in knowing that our collection services contribute to keeping the global cash flow moving.
With the latter in mind, Brazil, being the eighth largest economy in the world, relies on its robust exports of diversified and high quality products to every corner of the globe. Unfortunately however, even with all of our exporting success, overseas payments are often delayed or not forthcoming at all.
As a result of these payment delays, my office receives hundreds of unpaid international claims each month, which are immediately forwarded to our trusted overseas collection partners. Although we are very multi-lingual and could try to collect claims from our office, it is our policy to initiate the collection process with a local colleague or collection agent for the following reasons:
- There’s nothing that can replace the communication effectiveness between a collector and debtor who are both native speakers of the same language. Although we pride ourselves in being fluent in English, Spanish, and other languages, it is not as effective when a Brazilian accented English speaker tries to negotiate with, for example, a native English speaker from Liverpool, England. If we were to speak to them with our thick accents and inability to understand Liverpudlian idioms and slang, it would most likely end up being a very counter productive collection effort.
- When a debtor understands we are calling from Brazil, thousands of miles from their location, that’s not going to provide much collection pressure. However, when our overseas on-site colleague calls from the debtor’s general location, or even shows up at the debtor’s home or office for a face-to-face meeting, they clearly understand that their advantage of extreme distance has been removed.
- Very few debtors are comfortable arranging remittances with foreign collection entities, even if the entity is an attorney. It’s much more effective to let our local colleagues initiate this process and we ask that they, like us, route payment directly to the original creditor. This makes the debtor more comfortable and decreases the chances of currency devaluation or other international transfer complications.
- If we start out collecting from our office, fail, and then give the claim to a local colleague, the future collection potential will be negatively impacted. The more times a debtor is contacted by different collection entities, the more jaded they can become with the process, reducing the chances of resolution or settlement. Therefore our goal is to always move to the point of greatest collection pressure by placing the claim with a local agency or firm as the first stop to maximize the collection possibility.
This last point is really the summary goal of the previous three. We believe that prioritizing the success of the collection for our client, though it may mean sharing fees with a local professional, presents the best chance for resolution, and our clients can be assured that this is our policy. This process, if used throughout our industry on foreign claims, is the best practice not only leading to collection success, but also strengthening the global collection assembly line, no matter where in the world the debtor is located.
Please contact Octávio Aronis at octavio@aronisadvogados.com.br.This article has been edited by Ed Bessenbacher of Stellar Risk Management Services, Inc.
