Once you've decided on delegating your delinquent accounts to a collection agency, the next question is how to find the best one. In today's current economy there are so many different kinds it can be confusing. Following are suggestions for finding the best collection agency to suit your needs.
Collection agencies use two kinds of fee structures. Some of them send you a bill each month, while others take their money out of the funds they recover for you. The latter is clearly preferable, because it doesn't cost you money upfront and it shows you that they have confidence in their ability to collect. There's really no reason to pay fees up front to a collection agency when so many of them don't require it.
The second thing you need to ask potential collection agencies is whether or not they belong to one of the professional collection associations. These two organizations are the Commercial Law League of America and the American Collectors Association.
Both professional collection societies insist on professional trade practices. This means not just the minimum (conforming to Fair Debt Collection Practices requirements) but also continuing education so their members understand the latest and best techniques in debt collection. Debt collection practices have changed radically over just the past couple of years so you don't want to hire someone who's behind the times.
The next question for a collection agency you want to hire is whether or not they will allow you to access your accounts online. Even though you're delegating collections to them, you want to be able to check your files to see how things are going at any time. A truly professional agency will understand this need and take care of it for you rather than making you rely on monthly reports.
You also want to pick an agency that uses private investigators or does investigations themselves with skip trace software. (A skip trace is a search for a person based on their previous known addresses.) Collections efforts can't be successful when you can't locate the debtor. This is a practice that all good collection agencies follow these days so make sure the one you choose does as well.
Ask your potential collection agency if they do all their own work or outsource it. If you're hiring a company you want that company to perform the actual work. Some agencies outsource their calls, including to offshore call centers. Unless your collections are international, in which case you will want an international collection agency that is familiar with the local culture, this is not a good idea. Debtors tend to take these calls less seriously.
The last thing you need to keep in mind is that a collection agency should have extended business hours and coverage in different time zones. If you have accounts across the country a local agency won't be able to call them during the prime collection hours. It's necessary to either have people working on a sliding schedule so the office is manned from 8:30 am Eastern time to 9:00 pm Pacific time, or hire a national collection agency that has offices in each time zone.
Collection agencies use two kinds of fee structures. Some of them send you a bill each month, while others take their money out of the funds they recover for you. The latter is clearly preferable, because it doesn't cost you money upfront and it shows you that they have confidence in their ability to collect. There's really no reason to pay fees up front to a collection agency when so many of them don't require it.
The second thing you need to ask potential collection agencies is whether or not they belong to one of the professional collection associations. These two organizations are the Commercial Law League of America and the American Collectors Association.
Both professional collection societies insist on professional trade practices. This means not just the minimum (conforming to Fair Debt Collection Practices requirements) but also continuing education so their members understand the latest and best techniques in debt collection. Debt collection practices have changed radically over just the past couple of years so you don't want to hire someone who's behind the times.
The next question for a collection agency you want to hire is whether or not they will allow you to access your accounts online. Even though you're delegating collections to them, you want to be able to check your files to see how things are going at any time. A truly professional agency will understand this need and take care of it for you rather than making you rely on monthly reports.
You also want to pick an agency that uses private investigators or does investigations themselves with skip trace software. (A skip trace is a search for a person based on their previous known addresses.) Collections efforts can't be successful when you can't locate the debtor. This is a practice that all good collection agencies follow these days so make sure the one you choose does as well.
Ask your potential collection agency if they do all their own work or outsource it. If you're hiring a company you want that company to perform the actual work. Some agencies outsource their calls, including to offshore call centers. Unless your collections are international, in which case you will want an international collection agency that is familiar with the local culture, this is not a good idea. Debtors tend to take these calls less seriously.
The last thing you need to keep in mind is that a collection agency should have extended business hours and coverage in different time zones. If you have accounts across the country a local agency won't be able to call them during the prime collection hours. It's necessary to either have people working on a sliding schedule so the office is manned from 8:30 am Eastern time to 9:00 pm Pacific time, or hire a national collection agency that has offices in each time zone.
About the Author:
David P. Montana has three decades experience as an industry professional, business consultant and published writer in debt collection services. David provides additional beneficial tools and resources about national collection agencies.
No comments:
Post a Comment