If you run a business, you are sure to have some customers who require a lot of follow-up before they pay you. Often you spend too much time and energy to collect money that is rightfully due to you. Giving this task to a collection agency will help you:
Concentrate on your core business rather than on non-core tasks like debt recovery.
Increase your debt collection and reduce bad debt.
You must consider the following factors while selecting a collection agency:
How many years of experience does the collection agency have?
Does it have experience in the debt collection services you require, such as commercial, medical or check collection?
Can it collect debt for your kind of account balance?
Can it give references?
2. Professional Collectors
Are professional collectors in the collection agency well trained to deal with your customers? Remember, they are going to represent you and tempers may run high in debt collection. One bad conversation can spoil your relations with the customer.
Legal Debt Collection Best Practices:
There are plenty of articles on the web that lay out in plain English what the Fair Debt Collections Practices Act says you can and cannot do. Just to give you some idea of the law’s requirements, here are some of the biggest:
– No telling any third party about the debt (except collection bureaus, collection agencies, or the debtor’s attorney).
– No calling on the telephone 9 pm – 8 am, or calling repeatedly in a way that is annoying.
– No postcards or envelopes that mention the debt.
– No threats to take actions you cannot or will not really take, such as seizing property, in the case of an unsecured debt.
– No misrepresenting yourself (e.g., “Hi! This is the Publisher’s Clearinghouse Sweepstakes. May I speak to John?”).
– No paying down the debt with payments the customer has directed be applied to other debts
Tips and Tricks for Legal Debt Collections:
With all these limits on what you can do to collect a debt, what can you do legally?
– Speak with the debtor personally on the telephone
Also it is important to know that there is a law in place intended to protect the people that collection agencies contact. The FDCPA (Fair Debt Collection Practices Act) was enacted to keep debt collectors from abusing, harassing, or deceiving a person when attempting to collect a debt. It also gives debt collectors strict guidelines to follow when collecting a debt.