There are more than 5,000 fully accredited debt collection agencies in the United States alone, so it is understandable if you feel intimidated when it comes to choosing the best collection agency. This is compounded by the fact that you tend to hear many unfairly negative comments about debt collectors, from people who have never run a business and don’t understand just how valuable debt collection services are.
So if you find yourself in need of a collection company but don’t know how to find one out of the many who claim to be one, you should take into heart the following tips:
Make Sure the Agency is Fully Licensed
There are numerous reasons why the commercial collection agency needs to be fully licensed. For starters, debt collection agencies need a license to operate in the first place. And you wouldn’t want to be associated with firms that operate without a license. Second, a license means that the firm knows what it is doing because they would otherwise not be able to secure a license if they lack at least the basic capabilities of a collection agency. Keep in mind that different states will have different requirements, so you need to first check the requirements of the state you will operate in.
Find an Agency That Can Handle the Debt You Need Collected
Not all debts are the same. Collecting on a debt that’s only 15 days overdue is not the same as tracking down an unresponsive debtor who has failed to settle 180 days past the debt’s due. And you have to make sure that that the agency is experienced on the type that you need collected. Granted that large firms tend to have experience on all types of debts, but there are times when you need to save money and must go for a smaller firm, which may have a more limited expertise.
The Agency Must Be Fully Transparent
The firm you hire must be willing to provide detailed information on the collections process. This could include how the debtors are approached, how often, or whether they are even contacted. Be wary of firms that don’t want to be transparent. This is because the collection agency will represent you, and in anything they do it will be your company’s name on the line. So you should at least want to review what they have been doing just to ensure they aren’t doing anything illegal or unethical.
Make Sure You Are Covered, Legally
A reputable agency will not put you in any legal trouble, but the potential is always there. After all, all those horror stories from consumers about being harangued and hounded by debt collectors have got to come from somewhere. So you need to cover your own behind and make sure that the collection agency that you will hire will sign a clear terms of agreement with you that will guarantee that they are not doing anything that will make your company legally liable.
At the end of the day, most of the problems with debt collection stem from choosing the wrong firm to handle your debt collections. So if you want your company’s debt collections problems to go away without being mired in legal troubles, make sure you get only the best business collection agency.
Joan Geller is an accomplished financial expert in the financial markets, working mostly in the field of collection agency services. These days she shares her knowledge on ethical debt collection practices to companies that need it.
Pen name/Author Name: Joan Geller
Company Name: Nelson, Cooper & Ortiz, LLC