Debt collection sucks for all parties involved: For debtors, receiving hassling phone calls and letters in the mail can be demoralizing, especially if they feel they are unable to pay. For debt collectors, letters and calls can go ignored, reducing their ability to get repaid.
To solve both those problems, a startup called Collectly is moving the process online and providing more transparency around how debt collection is going. By doing so, the company is recovering debt at twice the rate of traditional collection agencies.
Collectly was founded by Levon Brutyan, who was managing director of a collections agency in Europe before setting out to reshape the industry with technology. He teamed up with machine learning expert Max Mizotin, who built the platform.
According to Brutyan, the way debt collection works today is that agencies send letters to debtors who owe money. If they don’t hear back, they send another letter. And if that doesn’t work, agents start making calls to debtors. If none of that works, they wait a few weeks and start the cycle all over again.
The longer a bill remains in arrears, the less likely it will be repaid. Collectly attempts to shorten those cycles by tracking and learning about a debtor through each interaction. The platform integrates with most major accounting software, allowing users to select which accounts it should follow up on.