A recent ruling by the Supreme Court highlights how important it is to hire the right collection agency.
The court recently allowed a class-action lawsuit against a collection agency to proceed, stating that the companies claim that they (and other collection agencies as well) should be protected from state “usury” laws barring money-lending at unreasonably high interest rates.
Essentially the court left in place an earlier ruling by the 2nd U.S. Circuit Court of Appeals in New York that found that collection agencies were not national banks and therefore should not be protected from the state’s usury laws.
Since some collection agencies buy debt from banks and other creditors, many charge high annual interest rates on the outstanding debt they purchase.
What does the ruling mean?
The key issue for debt collection companies is whether or not agencies deserve the protections outlined in the Federal National Bank Act.
If afforded this protection collections would be allowed to charge high interest rates on outstanding debt. Additionally, the lawsuit claims that the collection agency mentioned in the article violated the Fair Debt Collection Practices Act.
If you run a collection agency these rulings could impact how you run you day-to-day operations and could impact profit margins. However, if you are looking to collect revenue that is rightfully owed to you one key point remains… hiring the right agency determines how much you’ll be able to collect, and whether or not former customers or clients pay some (or all) of what’s owed, or decide to take the collection agency to court.
At the end of the day, outsourcing collection issues and headaches makes good business sense, because lawsuits like the one mentioned in the article will only continue to become more commonplace, as people elect to file a lawsuit rather than pay their outstanding invoices or bills.
Find the right collection agency today
Save time, money and aggravation by hiring a professional 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)
- you can work with a commercial collection agency that can help you recover what’s rightfully yours.
Either way it’s your money… you decide.