When considering outsourcing collections to an agency – a major factor is the ability to maintain good client relations while attempting to collect a debt.
An agency that is sensitive to your needs is the best choice.
And often outsourcing can be a better decision when collections become “too personal”. Family members who work for the business often can become too heavy handed on aging accounts because they take the inability to pay the debt as a personal slight.
Here are five points to keep in mind when selecting a collection agency for your business.
How to choose the right collection agency
Choosing an agency begins with research.
Often agencies will specialize in certain areas of business, for example medical, technology or retail accounts.
Each state has different rules that govern collection agencies.
Make sure they are bonded licensed to work in that state. Check the Better Business Bureau and Attorney General’s Office for complaints.
Error and omission insurance is recommended
If an agency fails to comply with the Fair Credit Debt Collection Practices Act, they or you will be liable for penalties. Make sure they are covered in the event they are held liable for using aggressive tactics or the debtor feels the collection agency acted in bad faith.
Flat fees vs. contingency fees
Flat fees are offered early in the debt collection process.
Contingency fees are a percentage of what is collected from the debtor at a rate of about 25-45% of the debt – but usually there is no charge if nothing is collected.
Consider their track record
If you can get references from happy customers that is always best. And we recommend going with a company that uses “skip tracing,” the ability to trace a debtor that has left town – by searching a variety of databases.
Being successful not only means experiencing higher volume sales but also means that you experience some of the familiar unpleasant aspects of doing volume business; having a collections problem, it is all part of the mix: the good, the bad, the ugly.
But with a little research, a collection agency can be a valuable business partner.
Remember, once you hire an agency you will not receive the total amount owed. The agency receives a fee to collect.
Ready to find the right collection agency?
Save time, money and aggravation by hiring a professional agency who can help you collect some (or all?) of your outstanding revenue.
Click the link and compare free collection agency quotes today.
After all, when you get down to it you really have two choices:
- you can keep doing what you’re doing (and hope for a different result), or
- you can find a collection agency that can help you recover what’s rightfully yours.
Either way it’s your money… you decide.