Although there are smart means of avoiding the process of debt collection, at times you will require taking the help of a professional in order to run your business. It will also help you in handling delinquent accounts that can be draining on your time, patience and resources. This said, not all debt collection agencies are created equal nor will they be ideal for your particular business. So there are a couple of things which you need to consider while hiring a collection agency.
5 Tips to Consider
Below are some points that you need to consider while hiring a business collection agency,
- Do Your Research- Different collection agencies specialize in different areas. There are some that specialize to secure funds from big organizations and there are others that work well with home or small businesses. Try to find out the kind of debtors the agency deals with mostly and the types of businesses that they serve.
- Check the Legitimacy of the Agency- Every state and locality has its unique rules and regulations when it comes to debt collection. Ensure that you hire an agency that is licensed, bonded and adheres to different rules and regulations laid down by the Fair Debt Collection Practices Act.
- Inquire About Skip Tracing- Debtors sometimes skip town. For combating this practice, some agencies use skip tracing. They use and also have access to different databases which allow them in locating a debtor that left no proper forwarding address. It is particularly vital if you have contacted the debtor personally, but were ignored routinely.
- Is the Agency Insured? – There are chances that the agency utilizes aggressive methods or the debtor feels that they acted with a bad faith. During such circumstances the debtor may sue. No matter you emerge victorious in the case it is quite obvious that you will want to ensure that you are not held responsible for hiring that collection agency. Always ask from the debt collector for a proof of insurance in the unfortunate event that the debtor takes both of you to court. Always remember a good agency will always have an Errors and Omissions Insurance as protection.
- Compare the Contingency Costs and Fees- After selecting a good agency make it a point to check their costs. Different agencies will offer a different charge for their solutions. Some may charge a flat fee while others may charge a contingency, so you need to pick one that is ideal for you.
The bottom line is, to deal with a debtor along with being frustrating can also be mentally taxing and slow. It is likely to drain your resources. So it is best to join hands with a reputable and experienced business debt collection agency rather than letting the debtor get away without paying you. Simply follow the aforementioned tips sincerely and see how it makes your selection process simpler. This way you can choose the best collection agency and also enjoy absolute value for money.
About the Author– Through the medium of this article Joe Willington has brought into limelight the wide availability of debt collection agencies and the tips to choose the best business collection agency for your particular purpose.