Latest news with #debtcollection
Zawya
a day ago
- Business
- Zawya
Kuwait's new law sets deadline, penalties for unpaid service fees
Kuwait - In a move aimed at tightening fiscal discipline and ensuring the effective recovery of dues, the Kuwaiti government has issued Decree-Law No. 75 of 2025 concerning the collection of fees and financial costs for the use of public facilities and services. The law introduces a framework to govern the financial relationship between ministries, public institutions, and beneficiaries of state-provided services, reinforcing the principle that public utilities—ranging from electricity and water to telecommunications and transport—are not free but must be paid for under regulatory and administrative mandates. Core Provisions and Mechanisms Automatic Service Suspension and Installment Flexibility Under Article 1, if a debtor (whether an individual or a private legal entity) fails to pay dues within 30 days of notification, the concerned ministry or public body may temporarily suspend services. This suspension is lifted automatically through the government's digital systems once the outstanding amounts are paid. The law allows for installment-based repayments for those financially unable to settle the dues in one go, pending approval from the creditor. However, failure to adhere to the installment plan leads to its cancellation and the immediate initiation of debt recovery procedures. Mandatory Grievance Process Before Legal Action To prevent unnecessary litigation, Article 2 mandates that any individual disputing the suspension of services or the calculation of dues must first file a written grievance with the concerned authority. A response must be issued within 30 days. If no response is given, it is considered a rejection. Only after this process can a lawsuit be filed—within 30 days of either the rejection notice or the lapse of the response period, whichever comes first. Priority Lien on Debtor's Assets In a bold move to secure state revenues, Article 3 grants government creditors a statutory lien over all assets—movable and immovable—owned by the debtor. This gives the state legal priority in recovering its dues ahead of other creditors. Immediate Enforcement of Debt Recovery Article 4 elevates any official debt document or collection decision issued by a government entity to the status of an 'executive instrument.' This means the state can enforce collection directly without the need to go through lengthy court proceedings, following the procedures of Kuwait's Civil and Commercial Procedures Law. Ten-Year Statute of Limitations with Interruptions Article 5 introduces a 10-year statute of limitations for fee collection, starting from the due date or the end of the relevant fiscal year for annual fees. Crucially, this limitation can be interrupted by any official notice from the creditor that includes the outstanding amount and a request for payment, effectively restarting the clock on the limitation period. Judicial Fees Exempted Article 6 clearly states that the new law does not apply to judicial fees, which remain governed by Kuwait's Judicial Fees Law No. 17 of 1973. Rationale Behind the Legislation The explanatory note accompanying the law clarifies that the government's decision stems from widespread abuse of the existing system. Many beneficiaries of public services—including water, electricity, communications, and municipal services—have delayed or avoided payments, thereby burdening the state financially. This law is not meant to serve merely as a budgetary resource measure, but as a strategic tool for ensuring the efficient management of public utilities and discouraging negligence by debtors. It aims to restore the financial discipline required for a sustainable public service framework. Moreover, the government recognizes that some debts have accumulated to levels beyond immediate payment. By permitting structured payment plans, the law seeks to offer a balanced approach—enforcing payment obligations while recognizing genuine financial hardship. Implementation Timeline Article 7 mandates that ministers shall enforce the law within their jurisdictions, and it will come into effect three months from the date of its publication in the Official Gazette. Decree-Law No. 75 of 2025 marks a pivotal shift in Kuwait's approach to public service fee collection. By combining legal enforcement with digital automation, flexible repayment options, and judicial safeguards, the law positions the state to better protect public funds while promoting accountability among service users. It's a clear message that the era of unchecked fee evasion is coming to an end. Arab Times | © Copyright 2024, All Rights Reserved Provided by SyndiGate Media Inc. (
Finextra
7 days ago
- Business
- Finextra
Smarter Debt Collection Strategies: How Human and AI Collaboration is Transforming the Future of Col: By Naina Rajgopalan
In today's dynamic financial environment, lending businesses are under growing pressure. Rising delinquency rates, shifting customer expectations, and economic volatility are making traditional, one-size-fits-all collections strategies increasingly ineffective. To stay ahead, organizations must embrace smarter, more adaptive approaches to debt collection—ones that combine the power of technology with the irreplaceable nuance of human judgment. The most forward-thinking financial institutions are now adopting hybrid collections models—a strategic blend of human expertise and AI-powered automation. This approach not only boosts efficiency and recovery rates but also enhances customer satisfaction and ensures stronger compliance with regulatory standards. In this blog, we'll explore how this human-AI synergy is revolutionizing collections and why it's becoming essential for long-term success. Why Traditional Collection Strategies Are No Longer Enough Conventional debt recovery methods—manual outreach, static campaigns, and rigid scripts—may have worked in the past. But as debt portfolios grow and borrower behavior evolves, these strategies are hitting their limits. Lenders today face: Operational scalability issues Inconsistent outcomes Low engagement rates Compliance risks The path forward lies in moving beyond outdated approaches and embracing a smarter, more integrated system—one that merges human empathy with AI precision. Striking the Balance: Human vs. AI in Debt Collection Let's examine the unique strengths and limitations of human-only and fully automated collection approaches. Human-Only Collections Strengths: Empathy & Emotional Intelligence: Humans build trust through compassion and personalized engagement. Complex Judgments: Skilled collectors use instinct and experience to tailor flexible solutions. Negotiation Skills: Humans can navigate sensitive conversations and create win-win payment plans. Limitations: Limited Scalability: One agent can manage only a finite number of accounts. Inconsistency: Outcomes vary depending on individual collectors. Burnout Risk: High emotional load can reduce long-term productivity and morale. Fully Automated Collections Strengths: High-Speed Scalability: AI can manage thousands of accounts simultaneously. Consistency: Processes are standardized, reducing human error. Efficiency: Automation speeds up resolution time and operational throughput. Limitations: Lack of Nuance: AI often fails in emotionally complex or ambiguous scenarios. Impersonal Interactions: Automated messages can feel robotic and disengaging. Limited Flexibility: AI struggles with novel or unpredictable cases. The Hybrid Approach: Where Human Insight Meets AI Intelligence The sweet spot lies in integrating AI with human decision-making—leveraging the strengths of both to create a more effective, adaptive collections model. How It Works: AI-Augmented Human Interactions: Collectors are equipped with real-time AI recommendations, helping them tailor communication strategies, suggest payment plans, or flag regulatory concerns. Human-Guided AI Learning: Human feedback is used to continuously refine AI algorithms, improving accuracy and decision-making over time. Smart Case Distribution: AI automatically handles routine and low-risk accounts, while complex cases are routed to experienced human agents—ensuring optimal resource allocation. Why This Hybrid Model Works Adopting a human-AI collaboration model delivers measurable benefits across key business metrics: Higher Recovery Rates Organizations using hybrid strategies report a 15–25% improvement in collections, thanks to better personalization and smarter outreach. Enhanced Customer Experience Empathetic conversations, guided by AI insights, create more relevant and respectful interactions—boosting customer trust and loyalty. Greater Operational Efficiency Routine tasks like follow-ups, reminders, and document processing are automated, freeing up human agents for high-impact work. Stronger Compliance Real-time regulatory checks embedded in AI systems help minimize legal risks while enabling human oversight in complex cases. Improved Employee Satisfaction Collectors experience less burnout and more job satisfaction when they can focus on meaningful interactions rather than repetitive tasks. AI in Action: Industry Trends According to TransUnion research, 57% of debt collection agencies have already integrated AI into their operations—primarily for account segmentation and predictive analytics. The adoption of self-service portals has also surged, growing from 79% to 88% in 2024 alone. This trend signals a clear shift toward smarter, more customer-centric collection practices across the industry. Recommend Read: "Good debt vs. bad debt in India: How to make smart borrowing decisions" How to Implement a Smarter Debt Collection Strategy Here's a roadmap to help your organization adopt a hybrid collections model: Evaluate Current Processes: Identify high-effort, low-value activities suitable for automation and those needing human intervention. Define a Clear Hybrid Strategy: Set rules for AI-human collaboration, including escalation criteria and feedback loops. Adopt the Right Technology: Choose platforms with real-time analytics, configurable workflows, and robust compliance features. Train Your Team: Educate collectors on how to effectively use AI tools to enhance their performance—not replace it. Measure, Learn, Improve: Monitor KPIs, gather user feedback, and continuously optimize your model for better outcomes. Looking Ahead: The Future of Collections is Collaborative In the evolving world of finance, the most successful lenders will be those who can blend human empathy with AI precision. The question is no longer whether to use AI in collections—but how to use it most effectively in tandem with human expertise. By adopting smarter, hybrid debt collection strategies, your organization can: Reduce delinquency Enhance customer experience Improve compliance Boost operational performance The future of collections is not human or AI—it's human and AI working together to achieve smarter outcomes. Recommend Read: "Role of Artificial Intelligence (AI) in debt collections" Frequently Asked Questions (FAQs) 1. What are smarter debt collection strategies? They combine AI and human expertise to personalize outreach, optimize efficiency, and ensure regulatory compliance—essential in today's rapidly changing lending environment. 2. How does human-AI collaboration improve recovery rates? It pairs data-driven targeting with empathetic human conversations, increasing customer engagement and driving better resolutions. 3. What is a hybrid collections model? It's a strategic approach where AI handles routine tasks while humans focus on complex negotiations—creating a balanced, scalable workflow. 4. Can AI replace human collectors entirely? No. AI excels in automation but lacks emotional intelligence. Human collectors remain vital for sensitive cases and complex decision-making. 5. How can my business implement this strategy? Start with process evaluation, adopt intelligent tools, train your team, and iterate based on performance data and feedback.
Yahoo
31-05-2025
- Business
- Yahoo
How to pay off a debt in collections
Before paying a debt in collections, verify it's legitimate and collectible to avoid scams or zombie debt. You have rights under the Fair Debt Collection Practices Act (FDCPA) that protect you from harassment and abuse. Negotiating a payment or settlement plan, especially in writing, can help you resolve debt while minimizing credit damage. Always document all communication and payments to avoid future disputes. No one wants to receive a call from a debt collector. But if you've fallen behind on paying your credit cards, loans or bills, your account may be sent to collections. Dealing with these debt collection companies can be stressful and embarrassing, but it's more common than you think. In the first quarter of 2025, the U.S. hit $18.20 trillion in household debt, and the average delinquency rate went up 0.7 percentage point from the previous quarter to 4.3 percent. Paying off your outstanding debts is important, but you want to do it the right way. A misstep here and there can result in you paying more debt than you owe, reopening zombie debt or exposing yourself to a scam. Bankrate insight As you move through this process, document everything. Keep copies of letters, emails, payment receipts and any agreements you make with the collector. Also note the dates of phone calls and what was said in the call. If you live in a one-party state, you could consider recording your phone conversations. Before taking any action to pay off a debt in collections, verify the debt belongs to you. Gather all relevant information about the debt, including the amount owed, the original creditor and any other account facts. If, after reviewing this information, you find that the debt is not yours, take steps to protect your credit and finances in case your identity has been stolen. You can dispute errors directly with the credit bureaus. If the debt doesn't appear on your credit reports, you might have been targeted by a debt collection scam. Under the Fair Debt Collection Practices Act (FDCPA), collectors must follow strict rules: No calls between 9 p.m. and 8 a.m. No calls at work if you've requested they stop No excessive calls — no more than seven in a week or within seven days of last speaking to you about the debt No contacting you via email, text or social media if you've opted out No disclosure of your debt to others Debt collectors are also strictly prohibited from harassing, threatening or verbally abusing you. If a debt collector breaches these regulations, you can contact your state's attorney general's office to find out your rights under state law. They can help you identify if you are protected under state-level collection regulations and laws like the California Consumer Financial Protection Law (CCFPL) and the Debt Collection Licensing Act (DCLA). Each state has a statute of limitations determining the legal time limit within which creditors or debt collectors can sue you for an unpaid debt. Statutes for different types of debt range from as little as two years up to 10 years or more. Once the statute is up, you can't be sued for the unpaid debt. However, it's important to know that you can reset the statute clock on old debt if you: Agree to pay Get a bankruptcy discharge revoked Make a new charge on the account Make a payment Understanding how these statutes work is essential as it impacts your legal obligations and rights regarding the debt. Research the statute of limitations in your state to know your rights. Not all debts are collectible. For instance: Medical debt under $500 or less than a year old can't appear on credit reports. Soon, medical debt will be completely barred from appearing on credit reports. Zombie debt — or very old debt — may no longer be legally enforceable. This debt is often past the statutes of limitations and may be too old to legally appear on your credit reports. You need to be especially careful to avoid resetting the clock on zombie debts. In addition to verifying the debt is collectible, you should contact the collection company and request a debt validation letter to ensure it has a legal right to collect on your debt. You may have more debt than you can pay off in a reasonable timeframe. In that case, you may be able to negotiate with your creditors about how much and when you pay. But first, you have to calculate how much money you can afford to commit to paying down your debts. Start by reviewing your budget and seeing how much cash you can free up. Determine how much money you could contribute to a lump sum payment or monthly installment. Be realistic and don't put yourself in a position where you need to take on more debt to pay off your existing debt. Once you're informed and have an idea of how much you can realistically pay, it's time to contact the collector. Be prepared to discuss your financial situation honestly and weigh different repayment plans. Effective negotiation can often lead to a reduced amount or favorable payment terms, especially if you pay a lump sum up front. Bankrate tip: For medical debt, contact the provider's billing office directly. They may offer hardship assistance or flexible plans. As a part of negotiating a payment plan, during your repayment period or after the collection has been settled, you may be able to request pay-for-delete agreement. This means the collection agency will remove the collection account from your credit report once repayment is complete. Get any pay-for-delete agreements in writing, and follow up with the creditor or collector to ensure the deletion request is processed. Be aware that changes to your credit reports can take 30 days or more to appear. Very few creditors will not offer a pay-for-delete agreement, but you can still ask. Once you've agreed on repayment terms, formalize the agreement in writing. Include: Payment amount Payment schedule Any additional terms or conditions. A clear plan reduces misunderstandings and ensures both parties follow the agreement accurately. Stick to the schedule and send payments promptly. This demonstrates good faith and prevents further collection efforts. For added security, consider: Mailing a check via USPS with a return receipt ($4.10) or using email confirmation ($2.62) Requesting a 'Certificate of Mailing' for proof of payment date To pay online, first confirm the debt and request instructions from the collection agency. Most have secure portals where you can log in to make payments. Always: Verify the site's legitimacy before entering payment info Save digital receipts and confirmation numbers Monitor your credit to ensure updates are reflected Debt in collections can take a toll on your finances and peace of mind — but you're not powerless. By verifying the debt, knowing your rights and negotiating smartly, you can pay off collections while protecting your credit and avoiding scams. How does debt in collections affect your credit score? Debt in collections has a huge impact on your credit score, especially if the debt also had late payments or a charge-off associated with it. It can take up to seven years for your credit to fully recover from one collection account. As time goes on, however, if you use good credit-building habits, negative marks will have less impact over time as newer things on your credit score have the most influence. If you need help fighting a collection account error or fraud, you can contact a reputable credit repair company. What's the safest way to pay a debt collector? Use payment methods that offer proof of payment — such as mailing a check with return receipt or using a secure online portal provided by the agency. Do collections go away once paid? No. Typically, paid collections will remain on your credit reports for up to seven years from the date of the original delinquency. However, lenders view paid collections more favorably than unpaid ones. What happens if you never pay collections? If you ignore or refuse to pay collections, the debt collector may escalate efforts to recover the debt. These could include: Take legal action Garnish wages (portion of paycheck withheld to pay off debt) Continue reporting the debt Unpaid collections that pass the statute of limitations can still severely impact your credit score and make it harder to secure loans or credit in the future. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Finextra
29-05-2025
- Business
- Finextra
Zelig advises Webio on its sale to Aryza
Zelig is delighted to announce that it has acted as sole financial advisor to Webio on its sale to Arzya. Webio, headquartered in Dublin, is a leading provider of cloud-native conversational AI customer engagement solutions for the financial services industry. 0 Webio's tools enable organisations to enhance efficiency, improve customer experiences, and drive meaningful outcomes, particularly in the area of debt collections. Webio is backed by leading venture capital investors including Finch Capital and Enterprise Ireland. Aryza, headquartered in Dublin, is a global provider of SaaS solutions for credit and debt lifecycle management. The company's automated solutions streamline complex processes at every stage of the credit life cycle, from lending to debt, insolvency, and arrears management. Aryza is backed by Pollen Street Capital and Macquarie Capital Principal Finance. The acquisition will enable Aryza to offer Webio's conversational AI capabilities to its extensive customer base, particularly in the collections and recovery sector, enhancing the effectiveness of their customer engagement processes. Aryza will also embed Webio's technology into its broader product suite further enhancing this compelling cross-selling opportunity. 'Joining the Aryza Group marks an exciting new chapter for Webio, and we look forward to contributing to its ambitious vision. By combining our AI capabilities with Aryza's established product portfolio and market reach, we're in a strong position to enhance customer engagement and drive real innovation in financial services. Zelig's advice throughout this process was instrumental to its successful outcome, particularly in structuring a deal that aligned the objectives of the multiple stakeholders involved.' Cormac O'Neill Founder and CEO of Webio 'The addition of Webio to the Aryza family is a pivotal step in our journey to becoming a leader in AI-powered financial solutions. Their expertise in conversational AI, combined with their innovative, cloud-native platform, perfectly aligns with our vision for the future. Together, we'll be able to deliver exceptional value to our customers while continuing on our strategy to deliver SaaS-solutions across the full credit and debt cycle.' Colin Brown CEO of Aryza
Daily Mail
24-05-2025
- Business
- Daily Mail
TONY HETHERINGTON: I was hounded over an £11 road toll in Hungary - which I'd paid!
Tony Hetherington is Financial Mail on Sunday's ace investigator, fighting readers corners, revealing the truth that lies behind closed doors and winning victories for those who have been left out-of-pocket. Find out how to contact him below. J.W. writes: Trace Debt Recovery UK, acting on behalf of Euro Parking Collection, is attempting to fine me £303. The alleged offence is non-payment of a road toll in Hungary, where I was driving my motorhome in 2023. I paid the correct toll of 5,500 Hungarian forints (about £11) at the time, and presented my vehicle registration document to the cashier, but they mistakenly recorded the letter D on the numberplate as a letter P. Tony Hetherington replies: Trace Debt Recovery UK, based in Northampton, sent you a mass-produced threatening letter. Headed 'Final Notice', it warned that if you failed to hand over £303, you could face county court action which might damage your credit rating. What makes me think the letter was mass-produced? Well, it refers to the 'date of the parking charge notice', completely contradicting the allegation that you have an 'outstanding unpaid Hungarian toll roads penalty charge notice'. There's a bit of a difference! I asked the debt collectors to take no action while I contacted their client, Euro Parking Collection (EPC), and they immediately agreed. This was sensible, since you have the receipt proving you paid the toll fee in Hungary, and the mistake was not made by you. Surely EPC would understand? Well, no. It ruled that you were at fault for failing to spot the cashier had got it wrong. Grudgingly it scrapped the demand for £303, but replaced it with a £49 bill – it described this as an 'administrative charge' to alter its records to show the correct registration. It would have been easy for you to give in to any of these threats, but you told me: 'They are bullying people into paying up. Not me! Twenty years in the RAF has given me a thick skin.' EPC told me it was just obeying rules set by its Hungarian client. Fine, I replied, so this is a civil debt case, not a criminal matter. Surely it should be considered in a civil court in Hungary? Or, if EPC believed it could sue you in a UK court, then you could name the cashier and the cashier's employer as witnesses. So I asked EPC to provide their details, and heard back that it was unable to speak on behalf of its client – yet this is exactly what it is doing when it issues demands. On top of this, EPC is a member of the British Parking Association, the trade body which says its members should accept minor keying errors as long as the driver has paid the parking fee. I also reminded EPC that paying the DVLA in Swansea to hand over your name and address did not comply with its data protection rules, where motorists' details 'may not be shared with any organisations based outside the UK'. In a nutshell, the Hungarians lost no money because you'd paid the toll road fee, but they demanded more money because of the mistake made by their own employee. They hired EPC to collect the cash and EPC hired Trace Debt Recovery UK to threaten you. But none of them are a penny richer because you had the guts to stand up to them. Now let our Government explain why it caves in to every attempt to regulate the sharks who inhabit the car park industry. My £1,100 gas bill – for an empty house A.R. writes: My father died in June. I informed British Gas and the electricity supply was put in my name, but the gas account was unchanged for months. In November, I smelled gas. Cadent Gas came and found the meter was leaking, so they changed it and recorded the readings. British Gas then sent me a big bill. Tony Hetherington replies: You told British Gas the house was unoccupied, and it said it would cancel the bill, but two weeks later an even bigger demand arrived. An engineer confirmed the new meter was faulty. However, the bills kept coming, and by the time you contacted me you were facing demands totalling more than £1,100. You were asked for a meter reading from when you moved into the house – but you had never moved in. I asked British Gas to investigate, and staff quickly found that Cadent Gas's meter readings were incorrect. The readings have now been amended to show that you used no gas at all. British Gas was willing to offer you a goodwill gesture of £100 too, but you declined this, telling me that all you wanted was for the demands to be sorted out, and this has now been done.
