Beginner’s Guide to Collections in South Dakota
South Dakota small business owners are often at a loss when it comes to collections. They’re not sure where they should start. When it comes to collections, there’s a lot to consider. That’s why we’ve written this beginner’s guide to collections in South Dakota.
Determine the Type of Collections Help That You Need
There are two types of collections that you can choose from: first party and third party. A first party collection is where you or someone who is part of your business is doing the collecting. In short, they call or otherwise contact the debtor as a direct representative of your business. Phone calls sound like, “Hi. This is John Smith. I’m calling for Mike Jones. Mike, I’m with ABC Services and it appears that your account is past due.”
Third party collections is what happens when you give your debt to a third party company to collect on. The debt collector is an employee of the debt collection agency and that’s how they represent themselves. However, any ill behavior on the part of the third party collector will reflect poorly upon your business.
Review Past Due Accounts
After you’ve decided whether you’re going to use first or third party collections, you need to do a thorough review of past due accounts that will enter into the collections process. If you’re charging a late fee or a collections fee, make sure that you’re allowed to do so under South Dakota collections law. Make sure that you know the amount past due, when the last payment was made, the amount of payment, and the services that were rendered.
Be Ready to Work with the Debtor
As a small business owner in South Dakota, you should be ready to work with the debtor when you contact them for collections. Taking the time to listen to the debtor, working out a payment plan, and following up on it can mean that you get paid much sooner.
Understand Collections Laws
When it comes to collections in South Dakota, you must be informed of the collections laws. Collections are governed by both federal and state law. Specifically, the Fair Debt Collection Practice Act lays out how debtors can and can’t be treated ruing the collections process. For instance, if the debtor asks you not to call them, you must stop calling them. You must provide verification of debt if it is requested. You cannot threaten or verbally harass the debtor.
Get Professional Collections Help
If you’re in South Dakota and you need help with collections, you have options. If you choose to outsource to a third party collections agency, make sure that you do your research. The agency should be licensed. You should also make sure that you understand the amount that you will pay the agency for collecting on it. Some third party debt collectors will buy the debt from you. Also, make sure that you look to ensure that the agency isn’t involved in any lawsuits of which they are being accused of violating the law in regards to collections. We are also licensed in several states as a third party collector. Clients ARM works on a contingency fee basis for our collections efforts. This means that we keep a portion of what we collect.
Clients ARM provides both first and third party collections for service based businesses in South Dakota. As first party collectors, we call on direct behalf of your company. Your past due clients talk to one of our US based agents and we use old fashioned customer service to help get you paid. Our goal is to represent your business in the best way possible.
Ready to get help with your collections? Call us now to schedule your free review. We can help you choose the right collections model for your business.