What You Must Know of Debt Collection Agencies before Hiring Them

What You Must Know of Debt Collection Agencies before Hiring Them

There isn’t a business that hasn’t ever suffered from bad
debt. The scale of bad debt is obviously different for different organizations.
If it is small you can of course try managing it in-house or waiting for your
clients to pay up. When it is sizable you can’t relax as piling bad debts has
the potential to bring your business down by causing liquidity crunch. This is
where you need to find a collection agency that would take care of collecting
your debt. With so many agencies around making the right choice isn’t the
easiest of tasks to do. So here we look at some of the things you need to know
about debt collection agencies before hiring them that would ensure higher and
speedier collection of your bad debt.

• Track Record – There
  are several debt collection agencies that have multiple lawsuits against them
  due to highhandedness in dealing with collection. It is a tricky territory
  where your rightful due collection attempt can come back to haunt you in the
  form of a lawsuit citing violation of rights. This is where it become important
  for you to carry out a thorough research on the kind of background an agency has
  in terms of debt collection.
• Industry Expertise –
  There are agencies that specialize in collecting for certain industry types.
  Some agencies have expertise in handling collection needs for startups and
  small businesses. It goes without saying that inherent knowledge of dealing
  with customers and clients of a certain industry helps in expediting the whole
  process. If the agency has catered to customers like yours in the past it is a
  big advantage.
• Customer Treatment –
  The last thing you’d want to do is spoil your reputation in the market and hurt
  the relationship you have with your customers. This is where you need to know
  the collection agency would approach the job. What are the steps they would
  take to inform your customers and will you be kept in the loop during the
  process.
• Licensing
  – You’d surely not want to dig your grave by hiring a non-licensed debt
  collection agency but you need to be careful about the license part. If the
  agency is licensed to operate only in your state that may not be good enough if
  your debtors reside in other states. The best
  collection agency in the country would be licensed to operate in all the 50
  states and sometimes they can offer you these services on an international
  scale.
• Finding Missing Debtors –
  Dealing with debtors who have changed their location and phone numbers is the
  most challenging part of debt collection. The agency that you hire should have
  access to the latest tools that allow them to find out such debtors. They use
  methods like skip tracing to do so. If the agency isn’t competent in this you
  need to look for another door.
• Fees and Cost –
  How would the agency charge you? This is one of the most important things to
  know when you are looking to hire the best debt collection agency. There are
  agencies that charge you a flat fee for their services while others charge you
  a percentage of the debt collected. You need to do the math and find out which
  among these is financially beneficial to you. Make sure there are no hidden
  charges for the services that they offer you.