Choosing a professional debt collection agencies / service to manage your delinquent accounts and other related tasks can be a wise decision, but where do you start? You want an agency that will represent your organization in a responsible and professional manner, and one that provides a satisfactory rate of recovery while maintaining your public image. You're right to be wary! After all, the debt collection agencies you use can reflect back on your own company in the minds of consumers. But your bottom line can really suffer if you don't collect. So what do you do? Choose a debt collection agencies that will represent you ethically and professionally while still getting results! There are over 6,000 agencies in the U.S., though, so how do you go about evaluating and choosing a debt collection agency? Start with our handy debt collection agency checklist. The decision involves more than just giving your business to the lowest bidder - it requires careful consideration. Getting the most from your collection agency requires cooperation and strong communication. The following are some key issues that can help businesses determine the quality of an agency and help increase your success in the future.
Capabilities
What can the agency do for you? Collection agencies use experience and resources to provide professional accounts receivable management services for numerous industries. Agencies can offer skiptracing services to locate consumers when they can no longer be reached at the address or telephone numbers listed on the accounts. Many also have the ability to forward accounts to other agencies if a consumer has relocated.
You should consider the types of technology the agencies are using and how your technology might interface to allow for the electronic transfer of data and information. In addition, some agencies provide billing services, including coding, processing, printing and mailing, while others offer business administration and accounting services. Sometimes an agency provides pre-collect services, where collectors start working an account before it becomes past due. Other service agencies provide consulting, telemarketing, campaign calling, reminder and follow-up appointment calls and temporary office administration. Start with a general Internet search on the company name. Press releases, promotions, and awards are good signs that a company is thriving.
Check for high ratings, strong financials, and experience in the industry. References and testimonials can provide insight into what a working relationship would be like. Negative results aren't conclusive, but they should flag you to conduct more research.
Check out the debt collection agencies site, too. Do they provide information about their company and history readily, or do you have to really dig to find out something? Do they have client testimonials? Do they have value and mission statements that resonate with your own? They should!
Market Knowledge
Make sure the agency has the skills and knowledge needed to successfully collect on your particular type of account. For example, collectors working in medical collections must be familiar with medical terminology and insurance requirements, while collectors working in student loan collections need to demonstrate knowledge of the regulatory framework devised by the Secretary of Education, the lender/guarantor relationship and bankruptcy rules related to the collection of student loans. It's important for agencies and credit managers to be aware that each collection market needs to be handled differently
Recovery
Discuss recovery percentages and rates. The percentage rate of commission may be less important than the agency's percentage of return on the total dollars you refer for collection. For example, if you turn over $1,000 worth of accounts at a 25% commission rate and the collector recovers only $300, you will receive $225 from these "bad debts."
Procedures and Policies
Investigate the procedures an agency uses to collect, including when it begins working an account, the collection letters it uses and whether it has trained employees. Become familiar with the agency's policies and standards. A visit to the collection office can be helpful and allows you to observe the operation of the business.
Compliance with the Fair Debt Collection Practices Act (FDCPA), a federal law regulating the collection industry, is critical to third-party debt collection agencies. Inquire about the policies and practices the agency has in place to facilitate compliance.
Professional Credentials
Make sure the agency complies with all state licensing and bonding laws, if applicable. If licensing or bonding is not required in your state, find out how long the agency has been in business. Experience is often a good indication of quality.
Also, determine if the agency holds membership in state or national trade associations such as ACA International, the Association of Credit and Collection Professionals (ACA). Members of ACA agree to comply with all federal and state laws and regulations, as well as the ethical standards and guidelines established by the association.
Training and Development
Ask if the agency's employees receive on-going training and education.
Insurance
The purchasing of Errors and Omissions Liability Insurance (E & O) can also be an indicator of a conscientious agency. This insurance often extends coverage to the credit grantor as well as the agency. This is important because creditors can face litigation as a result of alleged violations by their collection agency.
Look for coverage on claims brought by consumers for wrongful acts such as libel, slander, wrongful eviction, wrongful entry, false arrest, harassment, invasion of privacy or interference with business. E&O Insurance should specifically cover violations of the FDCPA or Fair Credit Reporting Act (FCRA).
Summary
The above suggestions are important to consider when selecting an agency. Competition among collection services is good for you as the client. This competition contributes to a more professional and efficient industry. By carefully evaluating your company's needs, as well as the capabilities of the collection services available, you can maximize your accounts receivable income and ensure that your customers are handled properly. Careful selection of a third-party collection agency strengthens your bottom line and helps you retain customers, leading to a more profitable business.
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Capabilities
What can the agency do for you? Collection agencies use experience and resources to provide professional accounts receivable management services for numerous industries. Agencies can offer skiptracing services to locate consumers when they can no longer be reached at the address or telephone numbers listed on the accounts. Many also have the ability to forward accounts to other agencies if a consumer has relocated.
You should consider the types of technology the agencies are using and how your technology might interface to allow for the electronic transfer of data and information. In addition, some agencies provide billing services, including coding, processing, printing and mailing, while others offer business administration and accounting services. Sometimes an agency provides pre-collect services, where collectors start working an account before it becomes past due. Other service agencies provide consulting, telemarketing, campaign calling, reminder and follow-up appointment calls and temporary office administration. Start with a general Internet search on the company name. Press releases, promotions, and awards are good signs that a company is thriving.
Check for high ratings, strong financials, and experience in the industry. References and testimonials can provide insight into what a working relationship would be like. Negative results aren't conclusive, but they should flag you to conduct more research.
Check out the debt collection agencies site, too. Do they provide information about their company and history readily, or do you have to really dig to find out something? Do they have client testimonials? Do they have value and mission statements that resonate with your own? They should!
Market Knowledge
Make sure the agency has the skills and knowledge needed to successfully collect on your particular type of account. For example, collectors working in medical collections must be familiar with medical terminology and insurance requirements, while collectors working in student loan collections need to demonstrate knowledge of the regulatory framework devised by the Secretary of Education, the lender/guarantor relationship and bankruptcy rules related to the collection of student loans. It's important for agencies and credit managers to be aware that each collection market needs to be handled differently
Recovery
Discuss recovery percentages and rates. The percentage rate of commission may be less important than the agency's percentage of return on the total dollars you refer for collection. For example, if you turn over $1,000 worth of accounts at a 25% commission rate and the collector recovers only $300, you will receive $225 from these "bad debts."
Procedures and Policies
Investigate the procedures an agency uses to collect, including when it begins working an account, the collection letters it uses and whether it has trained employees. Become familiar with the agency's policies and standards. A visit to the collection office can be helpful and allows you to observe the operation of the business.
Compliance with the Fair Debt Collection Practices Act (FDCPA), a federal law regulating the collection industry, is critical to third-party debt collection agencies. Inquire about the policies and practices the agency has in place to facilitate compliance.
Professional Credentials
Make sure the agency complies with all state licensing and bonding laws, if applicable. If licensing or bonding is not required in your state, find out how long the agency has been in business. Experience is often a good indication of quality.
Also, determine if the agency holds membership in state or national trade associations such as ACA International, the Association of Credit and Collection Professionals (ACA). Members of ACA agree to comply with all federal and state laws and regulations, as well as the ethical standards and guidelines established by the association.
Training and Development
Ask if the agency's employees receive on-going training and education.
Insurance
The purchasing of Errors and Omissions Liability Insurance (E & O) can also be an indicator of a conscientious agency. This insurance often extends coverage to the credit grantor as well as the agency. This is important because creditors can face litigation as a result of alleged violations by their collection agency.
Look for coverage on claims brought by consumers for wrongful acts such as libel, slander, wrongful eviction, wrongful entry, false arrest, harassment, invasion of privacy or interference with business. E&O Insurance should specifically cover violations of the FDCPA or Fair Credit Reporting Act (FCRA).
Summary
The above suggestions are important to consider when selecting an agency. Competition among collection services is good for you as the client. This competition contributes to a more professional and efficient industry. By carefully evaluating your company's needs, as well as the capabilities of the collection services available, you can maximize your accounts receivable income and ensure that your customers are handled properly. Careful selection of a third-party collection agency strengthens your bottom line and helps you retain customers, leading to a more profitable business.
Find another great article at debtcollectionagenciess.com [http://www.debtcollectionagenciess.com]
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