Debt Recoveries Australia (DRA) is one of the most preferred debt collector in Australia, owned and founded by Adam Stewart in 2003. Adam joins us in this interview to talk about his passion and drive as a debt collector.
Adam’s educational background is related to business, while his passion lies in debt recovery. With this powerful combination of knowledge and passion, Adam saw the perfect opportunity to change the path of his career, giving birth to two companies – Debt Recoveries Australia and ADC Legal.
DRA is a Contingent Debt Collection company that works on a ‘No-Win, No-Fee‘ basis, which means they charge their clients according to the amount of debt they have successfully collected. ADC Legal, on the other hand, specialises in commercial litigation, insurance claim disputes, and other debt-related legal matters.
Wayne Bucklar: Today we’re joined by Adam Stewart of Debt Recoveries Australia. Adam is based in Melbourne, Australia and joins us to talk about his business and how he came to be there. Adam, welcome to the show.
Adam Stewart: Thanks Wayne. Yes, it’s good to be here.
What does Debt Recoveries Australia do?
Yes, sure Wayne. Well we are debt collectors. So we do the collection right through Australia and New Zealand for a range of clients. Mainly corporate clients, business-to-business, usually, debts over $5,000 but we also do debts that are smaller. We also have a litigation arm as well called ‘ADC Legal’. So the the debt recoveries arms called ‘Debt Recoveries Australia’ and we have a legal arm attached called ‘ADC Legal’ which means that we’ve got a one-stop shop for debt collection and legals right throughout Australia and New Zealand.
How did Debt Recoveries Australia get started?
Well it’s funny really, I actually started in the insurance game. I was started in insurance claims recoveries for a major insurer in Australia. So I was processing motor vehicle and property claims and then moved into claims recoveries which is recovering money, it claims incidences. And then I moved to a large debt collection company, I worked for them for a while and I developed a passion for debt collection. I found that I was good at it. Originally, I started doing the investigations work. So there’s two areas for the debt collection that make it quite interesting. So the first part that really interests me was what we call ‘Skip-tracing’. Skip-tracing is finding missing people or money and part of the skip-tracing is learning different techniques to find missing people and I found that quite interesting, finding people. And then the next part of debt collection is once you’ve found them is negotiating to get them to pay the money and I found I was good at that. I was good at negotiating with people to get money back. So it was something that I didn’t think I would be good at and yet I was good at. So it was the first time in my life that I had actually found my passion, something that I was good at and then I started Debt Recoveries Australia. I thought why not go with my passion, I had a background in business, I’d studied business at university and I thought, “Well this is a perfect opportunity to combine my studies with my passion and start my own business.” And that’s how Debt Recoveries Australia was born I think back 2003 now and I’m still passionate about debt collection. I love it, I’m proud to call myself a debt collector and it’s what I do for a living and I still find it quite interesting and challenging.
What characteristic is needed to become a good debt collector?
Probably, tenacity. I think you have to have tenacity but also be a good listener. So I write a blog each week about debt collection and one of my most popular blogs was ‘How to be An Awesome Debt Collector’ and one of the main points in that blog is listening. So when you finally find these debtors and get them online and you listen to them, you need to be able to listen to what they have to say and then negotiate with them to get a win-win scenario. So probably listening would be the most important aspect. Most of the debt collectors I know and we’re all part of the Institute of Mercantile Agents in Australia which is our advocacy body in Australia. So mostly other debt collectors I talked to or the most successful ones that I know are good listeners and good negotiators.
What debt collection categories do Debt Recoveries Australia work on?
Well, you have two main types of that, you have what we call the ‘Contingent Debt Collection’ which is commission-based collections which is what we do at Debt Recoveries Australia. So basically, we charge commission on what we recover, it’s what we call a ‘No-Win, No-Fee’ basis. So if we’re not successful, there’s no charge at all. We don’t charge any fee or whatsoever. If we are successful, we charge the commission on what we recover. So we only charge commission on the amount that we’ve actually recovered. So as the client, the client doesn’t pay anything unless we actually recover the money. There is debt purchase so you can actually buy debt. So in order to purchase debt, you need a credit license in Australia. So there are companies that actually purchase debt. We don’t actually purchase debt but we do what’s called Contingent Collection or Commission-based Debt Recovery. So it’s no-win, no-fee and as I said we have a one-stop shop so we also have the legal action available as well. And that’s obviously a fee basis for the legals but it’s good for our clients because it provides that one-stop shop for them. A lot of our clients have debts that are under $5,000 but also the over $5,000 debts or the larger debts, they might want to just go straight through to court action so we can do that for them. Part of our recovery process is that we actually include free legal letters of demand for our clients. It means that because we’ve got our own legal arm to back us up, we can actually send legal letter of demand as part of the collection process and provide that free of charge to our clients. And then it also gives us a bit of a lead in with our debtors so that the debtors are familiar with us and they’re familiar with our legal letters. So if we do go to that one’s further step for court action, the debtors are already familiar with us and they know us and then hopefully, it’ll bring them to the negotiating table which is the main point of setting a legal letter demand on a legal letterhead is that it’s going to put a little bit more pressure on the debtor to come to us and to come to the negotiating table, so that’s the whole point. We want to try and avoid legal action as much as possible. It’s going to work out more costly for our clients. So we try and do everything under the no-win, no-fee commission basis because that it’s no cost to our client. But if we have to, we can go legal, we can issue in every single court in Australia. So we’ve got that to back us up which is good.
Debt collection clients are different from debtors.
Yeah, that’s right. The debtors are people who owe the money, any company that has an outstanding debt. So our customers or our clients are the ones we’re looking for any business that has any outstanding debt owed to them. They might have tried themselves internally to try and collect the debt and we can also provide training internally for our clients to collect those debts. But once they get to that point where they’re unable to collect that debt themselves, then they give it to a debt collection agent such as us and as I said, it’s on that commission basis.
What do you advise debt collection clients to avoid losses?
I actually provide or write a blog each week and a lot of those blogs are geared towards helping our clients collect their debts internally. If I can give you a few quick tips on how to do that your terms, so you’d look at your terms first and your invoices. So we rewrite people’s terms and client’s terms quite a lot. So if you’ve got a contract or even if you don’t have a contract on your invoice, you should clearly stand on your invoice, what your penalties are for non-payment because as soon as you put a penalty clause on your invoice, it goes straight to the top of the pile to be paid. So if your invoice has no penalty fees on it, you’ll go straight to the bottom of the pile. People will pay those invoices that have the penalty fees on it first. So you could put something very simple like, ‘Please pay within 14 days.’ I suggest 14 days as terms because I think 14 days is reasonable to pay a bill these days with technology and online payments. And I always suggest to our clients to put the penalty terms on their invoices. So a simple sentence like ‘Please pay within 14 days or 30 days’ whatever your terms are. “If payment is not received within this time, we reserve the right to charge our recovery fee and/or legal fees and if payment is not made” – something along those lines. It’s best to get them written by a solicitor and we can do that for you, we can rewrite terms for our clients. And we also have some templates available on our website with some simple terms on it for our clients.
Who makes up Debt Recoveries Australia’s client base?
Probably, we have a lot of insurance clients. So we do a lot of insurance claims recoveries, simply because that’s my background and I know insurance claims recoveries. We also do corporate debt, so this is normal business-to-business corporate debt. So any business or corporation that has any outstanding debt, we can handle and we do some government agencies as well.
How do people get in touch with Debt Recoveries Australia?
The best way is to click on the link, the website is debtrecoveries.com.au or our 1300 numbers, 1300 799 511.
Wayne: Adam, it’s been a pleasure having you with us today. I appreciate your time. I realize you’re a busy man.
Adam: Thanks Wayne. Yes, it’s been terrific. Thanks very much.