Collection agencies come in many shapes and sizes with different specialties and
strengths. Selecting one is a daunting task, but here are 7 tips that can help you
make the right decision.
Try to identify your weakness when it comes to collecting your past due. What are
your biggest hurdles?
Make sure you identify your challenges so you can shop for an agency that
provides a service that matches your needs.
Debt collections companies often garner a bad reputation for both mistreating
debtors and for gaining capital from their clients. How does the agency account
for their collection activities? Important things to look for are
Experience matters and it matters in a broad sense. Making sure they meet these
simple criteria could go a long way in multiplying your returns.
Reporting a delinquency on a debtors credit report is the greatest leverage you
have. It is the single most powerful action you can take to ensure you receive your
past due. Reported debts stay on credit reports for 7 years and can have a huge
impact on debtors. An agency should:
Collections require an open door of communication between your practice and
the agency. Think about possible scenarios and how you and the agency will work
together if issues come up. Easy, fast communication and efficiency depends on:
Historically, collections have gone to the lowest bidder. Those that have the
lowest commission however, do not always have the highest collection rate. Make
sure the agency you are looking at:
Fees and their collection rates are 2 sides of a coin that reflect each other. A
higher collection rate comes only from one thing: more work.
Regulatory compliance plays a huge part in keeping both you and the agency’s
reputation intact and your revenue out of the red. A great agency protects your
Fines for regulatory noncompliance can go into the thousands having a loophole
free system can go a long way in keeping both your reputation and your revenue
in good condition.
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