How do you make ensure you are engaging the right debt collector in Singapore for the job?

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Feb 4, 2019

How do you make ensure you are engaging the right debt collector in Singapore for the job?

Need help with Debt Collection? Engage a professional Debt Collector Singapore

If you own a business and are owed a debt, collecting it yourself can prove to be a difficult process. Instead of trying to track down your debtors and recovering the amount owed, you might consider hiring a commercial debt collection agency.

What are legal debt collectors?

These agencies will work on your behalf to track down your debtors, collect the amounts owed and return it to you. Before you decide if hiring a commercial debt collection agency is right for you, it can be helpful to learn more about what they do, how they do it and what fees they may charge.

However, before you engage a debt collection process, do note the following: 

  • First, note that it is legal to lend to friends and family without a license, at any agreed upon interest rate (it’s not legal to lend to businesses). However, the written agreement (the IOU) is subject to a statute of limitations.
  • Debtors must initiate legal claims within six years of the stipulated repayment date. After that, the borrower is not obliged to pay.
  • If there is no IOU, or the statute of limitations is past, you may not be obliged to make repayment – no matter what the debt collectors may tell you.

So what factors should you consider when deciding to engage a professional debt collector in Singapore?


#1: Determining Your Collection Needs

Collection agencies help businesses receive payment for debts that are owed to them by their customers. These agencies are typically called in when an account goes unpaid for a certain amount of time past the payment period allowed in the contract with the customer. Businesses that have a significant number of unpaid accounts or a large amount of money lost in these accounts may find that hiring a collection agency is an essential part of doing business. In general, you will need to hire a collection agency if:

  • A customer has previously agreed to a payment plan to reconcile their agent but failed to follow through despite repeated follow ups. 
  • You decide it is too time consuming for you to do this on your own.
  • It is recommended that you engage debt collections from your new customer (one with whom you have no business history).

#2: Determine the type of agency you need – commercial or consumer

Collection agencies are split broadly into two types based on who they collect from: consumer and commercial. Commercial collection agencies specialize in collecting from businesses, while consumer agencies focus on individual people. However, some agencies are capable of effectively handling both. If you primarily have clients of one type, you should hire a specialize agency. If they are split fairly evenly, consider hiring two separate collection agencies or one that can handle both.

#3: Determine the age of the debts you need collected. 

Another important factor to consider is the age of the debt you are collecting. Collecting debt that is 120-180 days past due is completely different than collecting on newly delinquent debt. Assess the average age of your overdue accounts to help you find a suitable agency that specializes in that age of debt.

Also note that as stated above, debtors must initiate legal claims within six years of the stipulated repayment date. After that, the borrower is not obliged to pay.

#4: Calculate the average size and frequency of your debt collection needs.

In some cases, especially if you are running a business and need help with invoice payment collection, you also need to consider the adverage size and frequency of your debt collection needs. Typically, if you are a large company with a large number of debts or high debt value, you will want to work with a similarly-large collection agency. The same goes for small businesses. In most cases, smaller agencies can handle up to 100 annual claims for amounts under $1,000. On the other hand, you’ll have to hire a large agency if you have over 1000 annual claims or your claims are typically for amounts over $25,000. 


#1. Ask which services the company offers

Once you find a potential commercial debt collection agency, talk to them and learn more about the specific services they offer. Not all agencies will offer the same services, making some a better fit than others. Investigate the debt collection services an agency offers to learn if it’s the right one for your business.

  • Many services will offer to track down individuals that have relocated in an attempt to avoid repayment.
  • Some agencies will offer to forward your account to other agencies if a debtor has fled to another area.
  • Agencies may offer additional services such as preemptive debt collection or consultations.

#2. Check their license

Commercial debt collection agencies will need to be properly licensed before they can begin working with clients. If an agency you are considering isn’t licensed, you’ll want to look elsewhere. Before working with a debt collection agency, always make sure that they have any necessary and up to date licenses. It is acceptable to ask for a copy of the agency’s license.

#3. Check their strategy and methodology

  • Check the of your engaged debt collector it is important that your debt collectors do the right thing and do not engage in dubious debt collection tactics as described here.  Have them describe to you how they will go about the debt collection, and what they will do and will not do.
  • Ensure that your debt collectors engage in legal and proper debt collection tactics and strategies and understand the basic Singapore law.
  • Ask for their written policies and check with CASE or Singapore’s Credit Collection Association to learn if the agency has had any complaints filed against them.

#4. Check the agency’s qualifications and credentials.

Make sure that the agency you are considering is properly certified and has the necessary credentials.Engaging debt collector agencies that are not qualified or properly credentialed will create a potential liability for your business. Always ask to see evidence of an agency’s qualifications and credentials before hiring their services.

  • Your agency must be insured.
  • Try to look for an agency that is bonded.
  • Look for memberships in Singapore’s Credit Collection Association

#5. Learn about the agency’s past experience.

Learning more about an agency’s past successes and experiences can be a good way to judge if they are right for you. You’ll be able to learn how long they’ve been in operation, how well past clients have rated their services and how likely they are to provide valuable services for you.

  • The agency you’re working with should have a long history of success.
  • You can ask about specific rates, such as the rate that the agency is able to reclaim debts.


Like all services that you will engage, you need to check that you are comfortable with their service processes. That being said, it is vital that you check on the following

#1. Tracking of cases and communication protocols

Check if there will be an assigned account representative that will follow through your case. You may not like to have to deal with different representatives and may like to meet with the person who will be handed your case beforehand.  You should also be given a way to contact the agency whenever you have a question or want an update on your case. Ask about how you will receive your reports and how you can contact the agency before completing the deal. 

#2. Understand the agency’s fees and costs. 

Finally, be clear on the charges and fees. The exact billing policy will vary between agencies. However, there are two main methods that commercial debt collection agencies will use to collect their fees:

  • Some agencies will offer a one time flat-fee. Check the phases that the payment needs to be made and make sure you are agreeable before signing.
  • It’s common for agencies to take a percentage of any debts collected. The exact percentage will vary depending on the agency you are working with.

#3. Discuss the parameters your debt collector need to work within

When setting up the contract with the debt collection agency, make sure you communicate the boundaries for collecting debt and dealing with customers and that these terms are reflected in the contract. For instance, do they have a permissible percentage that they can discount debt for payment? If so, by how much and at what point? Can they take the creditor to court if they continue to ignore collection notices? Think about how you would like your customers to be dealt with and adjust your expectations for the collection agency appropriately.