Debt collection agencies can be very helpful when it comes to getting the money that you’re owed. Today, we’re going to tell you 6 things you need to know about debt collection agencies so that you can make an educated decision for your business.
First or Third-Party Collections?
First, you need to find out whether the debt collection agency you’re considering handles first or third-party collections. With first-party collections, the agency will call on your behalf and tell the debtors that they work with your company. They are a direct representative for your company. If you’re looking for first-party collections, you must make sure that they have a good reputation and aren’t involved in lawsuits that were filed because they were accused of abusing debtors. Third-party collections occur when the debt collection agency calls and identifies themselves as a debt collection agency.
Debt Collection Agencies Need to Be Licensed
This point is very important. The debt collection agency you hire must be licensed to collect where ever it is that the debtors live. So, make sure that you do your research to ensure that their license is in good standing.
Debt Collection Agencies Can Ruin Your Reputation
If the debt collection agency you hire breaks federal or state collections law, you could find your business named as a defendant in a lawsuit. You could also experience a decline in business if debtors complain about the collections process on social media. Bad experiences spread fast. So, you must make sure that you choose a debt collection agency that doesn’t have a reputation of using abusive practices.
Research Is Required
To make sure that you understand the behavior of the debt collection agency, do your own research. Don’t rely on one or two reviews listed by the BBB. Check Google Alerts. Do a search of court records in the state the debt collector will be calling to make sure that they aren’t being sued by the Attorney General. Taking the time to do this research is the only way you can know for sure if you want to work with a particular agency.
Your Colleagues May Have Suggestions
If you’re part of your local Chamber of Commerce or other business group, ask who they use for debt collection. This is a great way to find out who you should consider. You may even find out who your colleagues think that you should stay away from.
Make Sure That You Understand Their Pricing
With debt collection agencies, you should find out whether their pricing changes between first and third-party collections. You should find out if you’re paying in advance or if you’re going to pay an amount based on what the company is able to collect on your behalf. You should also read the contract and make sure that you understand how much time the collections agency will have to do their job.
Looking for a Debt Collection Agency That Uses Old-Fashioned Customer Service Principles?
If you’re looking for a debt collection agency that uses old-fashioned customer service principles, consider Clients ARM. We are licensed in several states and we know what it takes to help you get paid. Our collections rate is better than 90%. To find out how Clients ARM can help you, schedule your free consultation!