"Resorting to force and intimidation is useless, because a person who has not enough money to pay the credit installment has no way out. That is why we are not a typical collection company, our strategy is to find for our customers a convenient way to repay the debt in affordable installments, smaller than the original ones that they have not afforded to pay", adds Iwona Slomska (photo).

"Specifically, says Isabela Iacob, General Director of Kruk International in Romania, we do not require customers to pay the entire amount at once, but in monthly installments, which are always lower than the former ones, as we set an interest rate lower than the original one. The new installment is established after a talk by phone with our agents in the call-center, depending on how much each customer can pay. Let's take the example of a person who has a credit installment of 800 lei, but his income dropped to only 1,000 lei. Obviously in this case the person can no longer pay his debt. What we do is to agree with the client what is the sum which he can afford to pay monthly, over a longer period of time, after puting aside his subsistence expenses. So the new installment can diminish, on average, to 300 lei. Even the very indebted customers, with scarce income disposable, can find a way to pay a very low rate, until they will recover financially".

"The interest rate also diminishes. For example, in the case of an overdraft with an interest of 25%, we can drop it to 17-18%, depending on the customer's payment history. Thus the rate may lower to 300-400 lei from 600 lei. Repayment installments are based on a payment commitment contract, over a period ranging from 1-2 years to more years", said Isabela Iacob. She adds the average debt managed by her firm is around 5,000 lei and monthly medium rate is around 700 lei, that will decrease to an average of 300 lei in debt repayment commitments.

Iacob (photo) says it is important to be established a dialogue between the debt recovery company and its customers, so that they can find the apropriate solution to get out of the trouble.

The problem is that the Romanians are still reluctant to approach and work with a debt recovery company, as a survey ordered by Kruk reveals. We can deduce the reasons that stand behind: a not so good reputation of the debt recovery industry and the short experience of Romanians with financial services in general and more limited in terms of the relationship with a debt collection company. That is a precarious financial education, that can be improved primarily by providing more useful information by independent sources, about how a debt recovery company work, as this publication is doing.

"You're absolutely right, said Iwona Slomska, in the press conference organized by Kruk. There are many misconceptions about debt recovery companies, many people misunderstand how we really work with the debtors, with our clients. I think people will be more open if they know what they can expect from us. Therefore we want to provide as much information as we can to the public, in order for people to know who we are, to see that we have nothing to hide, and thus contribute to the financial education of the Romanians." Because in developed countries, she adds, the loans recovery activity is a commun task, it is well known by evereyone, as they have a long history of over 80 years.

Such a history is now under construction also in Romania, and Kruk is putting an important brick in the foundation, especially due to the innovative strategy brought to the market, through a transparent and convenient debt repayment manner established with its customers.

A strategy which already have brought results, as company representatives say: "This strategy is the only viable way for our customers to repay their debt and thus be able to return to a normal situation. An approach that has led not only to the increase of the pay commitments number but it also boosted the amount of repayments and thus improved the successful rate”, said Isabela Iacob.

So that everyone win: the creditor (bank), by recovering gradually its loan, the customers, by conveniently repaying their debt in installments. Finally, all bank customers win, because they will pay less for new loans. The losses from bad loans are transferred to the cost of new loans, so the smaller the losses, the lower the interest rates for new loans, Iacob added.

"It is very important for us that our customers can manage to pay their debts and return to a normal situation. Their victory is our victory, if they succed to pay their debt, that means that we have done our job. If they win, we win", added Iwona Slomska.