postheadericon How to Choose a Commercial Debt Collection Agency

Three Parts:Finding the Right AgencyChecking the Agency’s QualificationsWorking With Your AgencyCommunity Q&A

If you own a business and are owed a debt, collecting it yourself can prove to be a difficult process. Instead of trying to track down your debtors and recovering the amount owed, you might consider hiring a commercial debt collection agency. These agencies will work on your behalf to track down your debtors, collect the amounts owed and return it to you. Before you decide if hiring a commercial debt collection agency is right for you, it can be helpful to learn more about what they do, how they do it and what fees they may charge.

Part 1 Finding the Right Agency

How to Choose a Commercial Debt Collection Agency

1 Ask which services the company offers. Once you find a potential commercial debt collection agency, you should learn more about the specific services they offer. Not all agencies will offer the same services, making some a better fit than others. Investigate the services an agency offers to learn if it’s the right one for your business.[1] Many services will offer to track down individuals that have relocated in an attempt to avoid repayment. Some agencies will offer to forward your account to other agencies if a debtor has fled to another area. Agencies may offer additional services such as preemptive debt collection or consultations. 2 Understand what the focus of the agency is. Not all commercial debt collection agencies will have the same areas of focus and expertise. There may also be differences in the agency’s focus based on the size of that agency. Do some research and learn more about the agency’s focuses to learn if it is a good fit for your needs.[2] You’ll want to find an agency that focuses on an area similar to the focus of your business. For example, if you work in the medical industry, you’ll want an agency that has previous experience recovering debt in that industry. 3 Find an agency with the right capabilities. Different agencies will have different capabilities based on their size, location, history and professional direction. It’s a good idea to learn more about what a commercial debt collection agency can do for you before working with them.[3] Try to find a collection agency that is the same size as your business. You’ll want to make sure the agency is large enough to handle the amount of cases you have. Part 2 Checking the Agency’s Qualifications

How to Choose a Commercial Debt Collection Agency

1 Make sure the agency is licensed. Commercial debt collection agencies will need to be properly licensed before they can begin working with clients. If an agency you are considering isn’t licensed, you’ll want to look elsewhere. Before working with a debt collection agency, always make sure that they have any necessary and up to date licenses.[4] Not all states will require an agency to be licensed. It is acceptable to ask for a copy of the agency’s license.

How to Choose a Commercial Debt Collection Agency

2 Check the agency’s qualifications and credentials. You’ll want to make sure that the agency you are considering is properly certified and has the necessary credentials. Unfortunately, there may be some agencies that aren’t qualified or properly credentialed, creating a potential liability for your business. Always ask to see evidence of an agency’s qualifications and credentials before hiring their services.[5][6] Your agency must be insured. Try to look for an agency that is bonded. Look for memberships in trade associations, such as the ACA. 3 Check up on the agency’s policies and ethics. Debt collection can be a difficult process and you will want to make sure that the agency you’re working with does so ethically. It’s also a good idea to make sure the agency complies with federal standards for debt collection. Knowing that the agency will ethically collect your debts can help protect your business and give you peace of mind.[7][8] The agency you work with should comply with the FDCPA policies. Check with the better business bureau to learn if the agency has had any complaints filed against them. 4 Learn about the agency’s past experience. Learning more about an agency’s past successes and experiences can be a good way to judge if they are right for you. You’ll be able to learn how long they’ve been in operation, how well past clients have rated their services and how likely they are to provide valuable services for you.[9] The agency you’re working with should have a long history of success. You can ask about specific rates, such as the rate that the agency is able to reclaim debts. Part 3 Working With Your Agency

How to Choose a Commercial Debt Collection Agency

1 Ask how you can track your case and stay in communication. Most commercial debt collection agencies will offer convenient ways for you to track their collection efforts. You should also be given a way to contact the agency whenever you have a question or want an update on your case. Ask about how you will receive your reports and how you can contact the agency before completing the deal.[10] Many agencies will offer the ability to check on your cases online, anytime. If you have a large amount of cases, you’ll want to make sure you can receive online reports when you need them.

How to Choose a Commercial Debt Collection Agency

2 Understand the agency’s fees and costs. Once you’ve found an agency that meets your needs and is qualified to work, you’ll want to ask about their billing process. The exact billing policy will vary between agencies. However, there are two main methods that commercial debt collection agencies will use to collect their fees:[11] Some agencies will offer a one time flat-fee. It’s common for agencies to take a percentage of any debts collected. The exact percentage will vary depending on the agency you are working with. 3 Take advantage of additional benefits. Some agencies may offer additional benefits that you or your employees can make use of. These benefits can help you and your team learn more about debt collection and are often a great demonstration of the agency’s commitment to customer service. Ask about these examples of extra programs to get the most out of your commercial debt collection agency:[12] Training programs. Educational newsletters Webinars

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