Question 1

What is international debt collection?

Accepted Answer

Organizations involved in international business frequently encounter challenges with clients failing to promptly settle their invoices or outstanding balances. Upon seeking legal assistance, they often face various obstacles such as exorbitant advance fees, cumbersome administrative procedures, and lengthy legal processes. These can significantly escalate the costs and are thus highly inefficient. In such circumstances, organisations specialised in cross-border debt collection are an appealing alternative. The methods and quality of service provided by companies offering international debt collection can vary considerably. Transparency, communication, and experience are amongst those variables.

Question 2

How does specialized debt collection for the hospitality sector look like?

Accepted Answer

We maintain a large database with the contact details of those persons responsible for payment in the finance- and account payable departments. In addition, we are very well accustomed with the complaints and issues which are causing late payments: e.g. invoice corrections due to guest no-shows, contractual disputes about commission rates, or misunderstood agreements on corporate programs. 
 
Part of our added value is that a vast proportion of the hotels worldwide signed up by OTAs have once received a letter from us. Also most of the large hotel chains know about our existence and they naturally want to avoid our involvement. Also we are very well aware of the delays caused by payments systems like Onyx, Pegasus etc. and know how to act when payments got stuck or lost in between different channels.

Question 3

Why is it a good idea to outsource a collections process?

Accepted Answer

Collecting unpaid bills or outstanding balances can be a very time-consuming and frustrating activity. It can be uncomfortable to repeatedly ask clients to pay their overdue invoices. That is, if debtor contact details are known at all. Also, if the debtor is a long time customer there may be some emotional involvement which may frustrate the collections process. In these cases it can be important to get a third neutral party involved which can mediate with experience and authority without necessarily risking a business relationship.

Question 4

In which countries do you provide your service?

Accepted Answer

Our services are available in virtually every country, and over the years, we have successfully managed the collection of invoices in more than 120 countries worldwide. Our tailored procedures enable us to effectively collect from hotels in remote locations, and our dunning letters are accessible in over 35 languages. Should the need arise, we can coordinate legal proceedings in specific countries through our network of partner law firms and collection agencies.

This network comprises carefully selected agencies that adhere to stringent quality standards. We engage one collections agency per country, chosen based not only on membership fees, as is often the case in similar networks, but on demonstrated results and customer feedback. Agencies that fall short, exhibit unethical behavior, or fail to meet overall expectations are promptly replaced. This commitment ensures that we can guarantee high-quality collections and achieve consistently high success rates.

Modern Debt International takes pride in being a part of the Oddcoll© International network of collection agencies.

Question 5

Why is there a need for specialised debt collection in the hospitality sector?

Accepted Answer

The online booking sector operates within a non-conventional business framework. Major travel agencies such as HRS and Booking.com manage an extensive network, encompassing over 500,000 hotels registered on their booking portals. The sector witnesses a substantial daily influx of financial transactions with hotels globally. Despite advancements in payment processors like Pegasus and Onyx streamlining commission payments, a considerable number of relatively small invoices persistently go unpaid. The collection of these outstanding bills proves to be a notably inefficient and intricate process, primarily attributed to communication challenges, administrative complexities, and language barriers encountered at hotels.

The prevailing issues often revolve around the non-payment of commission invoices or the failure of advance fees remitted to hotels to materialize. Our extensive familiarity with the impediments and grievances expressed by hotels sheds light on the causes of delayed payments. Notable examples include invoice corrections stemming from guest no-shows, contractual disputes surrounding commission rates, and misunderstandings related to corporate program agreements.

Our clients seek a streamlined mechanism for addressing these challenges without resorting to the complexities of engaging local law firms. Our international debt collection procedures are meticulously designed to address and resolve these intricate issues.

In instances where a hotel defaults on payment, it is duly recorded on our international delinquent list. The concerned hotels are promptly notified of this measure, affording them the discretion to remain listed or rectify the outstanding payments. This list is routinely consulted by our clients to assess the payment discipline of prospective hotels and organisations they contemplate partnering with.

Question 6

What is your success rate?

Accepted Answer

The average success rate is every year around 55%. Our total average success rate over 2022 was 58.8%. Almost 3/5 invoices assigned to us we managed to successfully collect. The average time it takes collect an invoice varies between 24 hours and 12 months. On average we collect within a month.

Question 7

How do you operate in general?

Accepted Answer

We have built a collection procedure consisting of several different steps. These consecutive steps are important to show conviction, seriousness and continued confrontation. With every step comes a dunning letter which we issue in the language of the debtor. During the entire process we make several attempts to reach out to the debtor by phone. Once we have established contact with the debtor we will attempt to come to a quick settlement.
 
An important part of our service is to lower payment barriers for debtors. We offer all sorts of (online) payment options, varying from wire transfers, credit card, to Bitcoin. In case of large outstanding balances, we will offer repayment in instalments and will make the debtor sign a settlement agreement. In these cases we monitor adherence till the end of the repayment schedule.
 
If during the entire collections procedure a debtor fails to respond, we escalate a case to our local partner. New attempts will follow to confront debtor in native language, and when necessary pay a site visit.

Question 8

What are the requirements to start a collection case?

Accepted Answer

In order to start a collection case we need to receive the following basic details:
 
1. Any document corroborating a debt e.g. invoices, contracts, agreements, or any other written document directly indicating a debt is due. 
2. Details of the debt i.e. total outstanding balance, date of debt, and if necessary a short explanation on how the debt was incurred.
3. Full name of debtor including all available contact details, and if possible any correspondence with debtor relating to the debt.
 
These can submitted on a case to case base, or in case of bulk assignments in for example an excel sheet.

Question 9

What is no cure no pay?

Accepted Answer

No-cure-no-pay simply entails that you only pay us when we successfully collect your invoices. No payment is required for any further services.

Question 10

How do we pay for your service?

Accepted Answer

Every end of the month you receive an invoice from us stating the total commission due. We accept payments via wire transfers, credit card, and several other online payment options.

Question 11

How can we check progress on a case?

Accepted Answer

All our clients receive access to our case management system. You can track all developments on a case to case basis. Within the system all communications with a hotel is logged and you can for example view copies  of all letters which have been issued. Also, any payments received are entered in the system and you will receive automated notifications upon payment.

Question 12

What happens if a debtor does not pay at the end of a collections procedure?

Accepted Answer

Once our collections procedure ends and a debtor has not responded or started repaying the debt, we will list the debtor on our international delinquent list. This list can be consulted by our clients for credit and risk purposes. The detterence for the hotels is big and not rarely results in last minute payments. In addition, and depending on the outstanding balance we will give our clients the choice to explore any legal options in the country of debtor.

Question 13

Do you also provide legal services?

Accepted Answer

Our specialised legal services can support you in all sorts of commercial matters worldwide. Whether you are dealing with simple unpaid invoices, or any other complex contractual disputes, we can provide the expertise and experience needed to meet your legal challenges. We understand the complexities of international law and work closely with our global partners to successfully collect your claims abroad.

Question 14

How do we know your services and actions are legitimate and your clients indeed assigned you to collect on their behalf.

Accepted Answer

For every case our clients send us, they send us an official assignment. In order to verify our official involvement you can either contact us so we will send you proof, or you can ask for confirmation directly from our clients. If you are unsure whom to request this information from you can always ask us for further contact details.