Shame customers into paying: A new A/R best practice?

Out of ideas on how to collect from your late-paying customers? Why not give this a try.

El Cobrador del Frac, a debt collection agency in Spain, uses shame to get deadbeats to pay up.

Juan Carlos Granda, the owner of El Cobrador del Frac who’s famous for his signature top hat and tuxedo, has been known to follow unsuspecting debtors into restaurants and join them as they dine with their lunch dates — all without saying a word.

Here’s another example of the company’s cutting-edge work:

When a couple stiffed a wedding company out of 60,000 euro ($83,000) for their lavish wedding, El Cobrador del Frac went to work. The collection agency tracked down the guest list and called up each of the guests, asked if they had the lobster or the chicken — and kindly inquired where they could send the bill.

In the end, the couple did square up on their debt.

El Cobrador del Franc (translated as “The Debt Collector in Top Hat and Tails”) employs over 250 collectors, an equal number of secretaries and investigators, and boasts a 70% success rate in redeeming its debt.

Not bad numbers for any collection agency, but even more impressive considering Spain has an unemployment rate of 19.3% with almost 4 million people out of work.