Why Hire A Collection Agency?
Accounts Retrievable Systems – Why Hire a Collection Agency?
The rate at which people are accumulating debt and the states of the economy at the moment is quite sad. Many people are under a mountain of debt that they cannot pay back. However, there is a problem when you are one of the companies to which debt is owed. As a result of this, some companies resort to hiring a debt collection agency to recover the debt that would like resolved. The rest of this article will deal with some tips on how to hire a debt collection agency.
A debt collection agency is used by businesses or individuals to regain any money borrowed pulse the interest owed. The debt collection agency can be a third party debt collector if the original company has sold the debt to them. In another circumstance, the debt collection agency can only be contracted to act on behalf of the company the debt is owed to. When looking for a debt collection agency, you will need to check a company this is professional, effective, and trustworthy. This company will be acting on your behalf and it is important that they can effectively represent you.
First, when looking on how to choose a debt collection agency, choose an agency that is professional. As stated, they will be speaking to a customer or a client that owes you money. If the agency is not professional, this can hurt your company and your company’s name. Some debt collection agencies had been known to be one step away from threatening people to receive the money owed. This is quite unprofessional behavior and this is not an agency your company would like to be associated with. So before hiring any agency, research the reputation that they have.
Look for the following signs that indicate that you may need to work with a collection agency:
- A new customer does not respond to the first letter. For some unknown reason, the consumer will not or cannot pay. Potential losses could be kept to a minimum by prompt referral to a collection agency.
- Payment terms fail. In some cases irresponsible consumers pay when and if they want to. This group is responsible for 25 to 50 percent of the cost of collections. Cost and potential losses are reduced by quick action.
- The consumer makes repetitious, unfounded complaints. Such consumers are often better handled by a collection agency. You have to decide if this is worth your time or would you rather pay an agency a small percentage for that time and still get paid.
- The consumer totally denies responsibility. Without professional help, these accounts are usually written off as total losses. This is when it is good to have a signed credit application or contract and also, if possible, proof of the order and who placed it.
- Delinquency coexists with serious marital difficulties. These also require professional collection help, with the added urgency of obtaining payments before the disappearance of one or both of the responsible parties. If divorced people say the other is responsible, get a copy of the divorce decree, which will state who is responsible.
- Repeated delinquencies occur along with frequent changes of address or jobs. This group is responsible for 90 percent of all “skips.” A skip is a consumer who has moved without informing creditors or leaving a forwarding address. The chance of finding a consumer and collecting a debt will decrease over time, so quick action is important. Most agencies provide a skip-tracing service.
- Obvious financial irresponsibility is apparent. In such cases, little hope exists for voluntary payments and a quick settlement.
- There is an unauthorized transfer or disposal of goods delivered in a conditional sales contract.
Working With a Collection Agency
Once you decide on a collection agency, use their forms to list accounts or their format to upload accounts electronically. Give as much information as possible-accurate information about the account will improve collections.
In all cases, the minimum information should include:
- The correct name, address and telephone number of the debtor
- Name of the debtor’s spouse, if applicable
- Whether mail has been returned
- Debtor’s and/or spouse’s occupation or last known occupation and phone number
- Names of relatives, friends, neighbors and references
- Summary of any disputes
- Date of last transaction, order or payment
- Cellular phone, fax, e-mail address
- Nicknames or aliases, maiden name
If you have had all new customers fill out a credit application, all of the above information should be listed on there. The summary of disputes would be in the computer notes for the customer’s account. This makes it very easy–all the information you need, basically all in one place, on one piece of paper. This is one of the reasons why a credit application is so important. Cooperate with your collection agency. Rely on their experience, diligence, and judgment for the best and quickest results and promptly refer any contact from the debtor to the collection agency. Make sure that your collection agency is familiar with the nature of your goods or services–some agencies even specialize in collecting on specific services. For example, you might find an agency that only collects on delinquent auto loans, or medical bills, or hot tub sales. If you find an agency that specializes in your field, check them out; there is a reason they only do those types of collections. Don’t place any accounts with more than one agency. Make sure that if you change collection agencies, the accounts are only being worked on by one agency. Collection agencies’ fees are based on results, not on time spent on the account. Don’t expect payments to be made immediately.
Call Accounts Retrievable System For More Info at (800) 327-4687