October 14, 2008

Don't Make Me Use These Bagpipes

The most colorful debt collectors in the world apparently work in Spain. According to Thomas Catan (writing in the WSJ), one collection company sends a Scottish Collector to a debtor’s home. The kilt-wearing "musician" then plays the bagpipes until he gets paid.

Another company called the “Monastery of Collection” sends faux-Franciscan friars to collect owed funds. And a man named Manuel Llan shows up at a debtor’s home wearing a top hat and bow tie. He carries a briefcase with a sign reading, "The Debt Collector in Top Hat and Tails."

Just by showing up and knocking on the door, Lian can claim a success rate of 60%. Why is this so effective? Because Spaniards care deeply about public image; family honor is everything, and humiliation must be avoided at any... cost.

So instead of making phone calls threatening legal action, a debt collector might phone the neighbors of the person he’s targeted. Coyly asking around about the debtor’s whereabouts, hurts the person’s public image and catalyzes payment.

The crown jewel in one Spanish collection company’s history was obtained this way: [We were] pursuing a wealthy Madrid couple who hadn't paid the bill for a lavish wedding reception... So [we] obtained the guest list. "We called two or three people on the list and said: 'We're charging you €500 for the chicken you ate, for your part of the wedding cake,' " Mr. Granda recalls."

The bill was then paid.

One couldn’t do this in the U.S., where it’s illegal to harass debtors. Instead, debt-owing Americans have to be dragged into court. This is also a Spanish option, but many small businesses prefer not to wait for the years it might take for a court case to be resolved.

And if all this sounds barbaric to you, a consumer advocate says that live bears are used by debt collectors in Russia. (No word on whether the bears play bagpipes.)

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