Collections News: Collections Lawsuit Tossed
If you’re getting frustrated with your collections and you’re beginning to consider less than honest methods, Clients A.R.M. urges you to think again. We also urge you to research any collection agency that is collecting on your behalf. After all, they are representing your business. When you use illegal collection methods (including lying to the debtor) or if the collections agency does so, you put your entire business at risk. You can be sued and fined big bucks for violating the Fair Debt Collection Practices Act.
LMM Management’s Lucky Break
In Pennsylvania, a federal judge dismissed a lawsuit against LMM Management. The lawsuit alleged that LMM had set up letterhead to convince debtors that they were being contacted by a law firm. So, just how did LMM get lucky and have the suit thrown out? It was in the fine print. The letters sent out included a disclaimer stating that an attorney hadn’t actually looked at debtor’s account.
Collection Tips to Avoid a Lawsuit
The suit against LMM was dropped, but that doesn’t make their actions of falsely identifying their entity as a law firm the proper way to conduct business. The way that your company engages in collections is a direct reflection of your business. Collections doesn’t have to be ugly. It doesn’t have to involve lies to get paid. Clients A.R.M. has a 99% collections rate, and we focus on using old fashioned customer service principles to help both the debtor and the businesses we represent find solutions. Here are our top 5 collections tips.
- Communication is key. Have a plan in place to face delinquent accounts early in the AR process. This can include reminder calls and letters. It also means that when you talk to the debtor that you treat them with kindness.
- Have guidelines in place. Your AR plan should include collections guidelines. When do you send out a reminder letter? When do phone calls begin? What are your criteria for accepting payment plans on past due balances? When will you send out a final demand letter? When will you assign the matter over to a collections agency?
- Understand the Fair Debt Collection Practices Act and any local laws. It defines the actions that you can and cannot take as a debt collector. Yes, even if you are collecting on your own debt, you are still required to adhere to the law.
- Offer solutions to your past due clients. Being behind in your bills can be very overwhelming. Coming into the situation with solutions can be very beneficial for both you and the debtor.
- Remember that everything you say or do reflects on your business. If you treat the debtor with kindness, they will remember that and they will tell others. If you don’t, they will most likely do more than tell others. They may also take note of any violations of federal law and take you to court.
Get Professional Collections Help
When it is time to turn your past due accounts over to a collections agency, make sure that you know the reputation of the company. Check out the BBB and any affiliations that they list. Do a little Internet research to find out if there were or are any lawsuits because of their behavior. Don’t leave the reputation of your business to chance. Contact Clients A.R.M. to find out how we can help you.