The evolution of debt: From clay tablets to AI-powered debt collection

Debt is as old as commerce. Yet the way you collect outstanding invoices is completely different today than it was 100 years ago, let alone 4,000 years ago. Those who understand that development make better choices in their debt collection policies and avoid unnecessary damage to customer relationships.

In this article you will discover:

• How debt began on clay tablets and ended in dashboards and AI
• Why hard pressure almost always backfires
• How laws like the WIK and Wki protect you and your client
• How to collect faster and more humanely with a modern partner like Credifin

Once people began to barter and sell, the idea of debt arose. In ancient Mesopotamia, around 2000 BC, debts were already recorded on clay tablets. Those who did not pay lost possessions or even their freedom. Debt slavery was then not an exception but daily practice.

The Romans went a step further with the Publicani. These were entrepreneurs who bought from the state the right to collect taxes and debts. They were the first professional debt collectors. Their focus was on revenue, not humanity.

The most important lesson for you: debt collection has always been a specialty. Only the playing field has completely changed. Where the Publicani knew hardly any rules, you now work in a world with clear laws, supervision and rights for debtors. A modern debt collection agency must adhere to these and cannot hide behind hard pressure or unclear fees.

In the Middle Ages, power lay with local lords and the church. Those who were owed money often used pressure, threats or physical intimidation. Not law determined the outcome, but power. That is the exact opposite of how you want to deal with customers today.

By the end of the Middle Ages, that was slowly changing. In trading cities like Amsterdam and Venice, bills of exchange and clear agreements on credit emerged. Debt became negotiable and links between buyer and seller became more important. The precursors of the modern debt collection agency emerged during this period.

The lesson for your organization: power may work briefly, but it damages your reputation in the long run. Those who think from relationships and predictable agreements get more out of their accounts receivable portfolio than those who steer purely by pressure.

In the 19th century, people move to cities en masse, businesses grow and consumer credit emerges. Shopkeepers sell on account and want assurance of payment. During this period, the first modern debt collection agencies emerge in Europe and the United States.

New in this day and age is the importance of reputation. An agency that intervened too harshly damaged the client's name. You still see that today. If your collection partner communicates aggressively, it directly reflects on your brand. That costs you sales and trust.

This is why more and more organizations are opting for a specialized partner that monitors both results and customer relations. Exactly the role Credifin fulfills today in the amicable collection process.

In the 20th century, loans, credit cards and installment buying become commonplace. More and more consumers are dealing with debt. This calls for protection. In the Netherlands, this eventually leads to the WIK letter and the Collection Costs Act.

That law sets out how much dunning and collection fees you can charge. No more arbitrary amounts, but a clear scale. With tools such as our calculator on the calculation page you can avoid mistakes and unjustified claims.

For you, this means two things:

• You have clear ground rules that you can build on
• You are more likely to be paid if your charges are legally correct

A modern collection agency not only helps you follow up, but also guards that you stay within the legal framework. That way you avoid discussion, complaints and damage to your reputation.

Today you stand in a completely new era. With the Quality Collection Services Act (Wki), shortcuts for rogue agencies have disappeared. Only parties that meet strict requirements around professional knowledge, transparency and integrity are still allowed to collect professionally. Credifin is one of them, with Justis registration number 0023.

The real revolution is happening behind the scenes. Where piles of files and loose phone calls used to be the norm, now you work with data and smart systems. At Credifin, we combine legal knowledge with technology.

Consider:

• Predictive analytics with which we predict when a debtor is most likely to pay
• Communication through the channel that works best for that person, such as SMS, email or WhatsApp
• Signaling early problems so you can switch to help or a payment plan in time

We call that social collection. Not a hard threat, but smart follow-up. Do you see an increasing number of files in your own organization? Then professional debtor management will help you stay in control before amounts get out of hand.

The common thread through 4,000 years of debt collection is simple: debts do not solve themselves. It always takes a professional intermediary to get things moving. The difference between then and now is in how you do it.

If you look at your organization, you will learn from this history that you:

• Need to act quickly once an invoice goes unpaid
• Always communicate clearly and respectfully with your client
• Must work within clear legal frameworks such as the WIK and Wki
• Perform better with a partner that combines technology and humanity

With Credifin, you work on the basis of No Cure No Pay debt collection. This means that you do not run the risk of high costs in the event of non-payment. In the amicable process, we achieve a high average score for successful files, without putting unnecessary pressure on the relationship with your customer.

If you want to get started right away, you can file online in a few minutes through debt collection filing. If you first have questions or a complex situation, please contact us via our contact page. Together we will look at which approach suits your organization, your customers and your risk.