A typical legal department of an organization will approach the collection work strictly as a matter of law and not as a measure of revenue collection. Litigation would be the only tool used for recovery and no other tool which either known or used by the industry.
This approach taps into the collective efforts of debts primarily on the internet through social business services and Shield Debt Collection websites and leverages their networks for increased reach and exposure.
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Litigation as a recovery measure always has its own limitations as long court procedures and winding the Indian legal system has always been criticized for. On the other hand, foreign banking company introduced the concept of specialized debt collection service. debt collection services became one of the many services that began to be outsourced to specialized institutions.
The industry employs hundreds of thousands of Indians as professional collections, which serves several industries ranging from banks, telecom service providers to the insurance company. Typically, only a small recovery arising from customer defaults by periodic billing outsourcing to collection agencies.
Not only is the collection business has become a direct source of employment for thousands but their contribution to the economy is more pronounced because it helps infuse money back in the economy that would otherwise remain uncollected. The economic benefits of third-party debt collection are significant.
The debt collection industry in India has grown sharply this year due to higher borrowing costs; rising inflation and a general slowdown in the economy are forcing more companies and individuals into trouble.