• Skip to main content
  • Skip to primary sidebar

Collection Agency

  • Home
  • Cost
  • Contact Us for Collections

by

Expert Guide to Finding the Perfect Collection Agency

Hiring a collection agency may seem daunting, but it’s actually quite straightforward if you know what to look for. Here are some key pointers to help you find a reputable and effective collection agency.

1. Services Offered (High Importance)

Does the collection agency offer a Fixed Fee Collection Demands service?

While working on a contingency basis might benefit the agency, it’s not always the best option for you.

For example, if you have 10 overdue accounts worth $1,000 each, and they are less than 180 days old, they are relatively easy to collect. A series of low-cost demand letters on the agency’s letterhead can often prompt payment. Suppose you pay a total of $300 for the agency to send five collection demands to each of the 10 debtors. There’s a good chance that 3-4 of them will pay.

This fixed-fee service is ideal for newer accounts, as it’s straightforward with no additional fees. Plus, the $300 can often be claimed as a business expense on your taxes, making it nearly cost-free. The best part is that this method is amicable and won’t harm your reputation. If it doesn’t work, you can escalate to more intensive collection methods, such as phone calls.

Important Note: Ensure the agency does not impose an expiration date on unused accounts, and check if they can itemize various debts on their collection demands.

Do they also offer First Party and Legal services?

While you may not see the need for these services initially, you’ll likely appreciate them over time. These services allow your staff to focus on their core responsibilities rather than chasing after accounts receivable.

2. Request Compliance Documents (High Importance)

You might not be an expert on the laws surrounding debt collection, but you should still ask for documentation on the agency’s regulatory compliance, best practices, and data security measures. In the event of a violation or data breach, these documents can help reduce or eliminate your liability. Don’t just take their word for it over the phone—ask for PDF documents sent from their official email address and keep them safe. Also, ensure they are compliant with GLBA (Gramm-Leach-Bliley Act) and HIPAA (Health Insurance Portability and Accountability Act).

3. National Licensing (High Importance)

If a debtor relocates to another state, you don’t want to find out that your collection agency isn’t licensed there. Make sure the agency is licensed in all 50 states. They should have their own licenses and not rely on regional agencies.

4. Fees (Low Importance)

You might be surprised to see fees listed as a low priority, but consider this: a contingency fee of around 40% is standard. If an agency offers a lower fee, like 20-30%, they might not work as hard for you. The focus should be on how much they collect, not how much they charge.

For example, if you have $1,000 in debt to collect, and Collection Agency 1 charges a 25% fee but only recovers 15% of the accounts, you’ll end up with $112.50. On the other hand, if Collection Agency 2 charges a 40% fee but recovers 35% of the accounts, you’ll receive $210. Which agency would you choose—CA-1 or CA-2?

Unless an agency employs top-tier debt collectors and invests in compliance and security, they can’t do a good job for you.

5. References (Low Importance)

Don’t put too much stock in references provided by the agency. They’ll likely only give you clients who had positive experiences. Instead, ask about their average recovery rate for clients in your industry.

6. Online Reviews (High Importance)

The best metric for evaluating an agency is its Google Reviews. Look for an agency with over 1,000 reviews and an average rating of more than 4.5. Reviews should include feedback from both clients and the debtors they collect from. While some negative reviews are inevitable, an agency with a respectful and amicable approach to collections can help preserve your reputation.

7. Secure Online Client Portal (High Importance)

Avoid any collection agency that doesn’t have a secure online portal. Would you trust a bank that lacks an online platform? A secure portal reflects the agency’s commitment to data security. It should allow you to monitor collection activity, provide updates on individual debtors, offer monthly statements, and report on the accounts submitted for collections.

8. Credit Reporting (High Importance)

Credit reporting is a powerful tool for recovering money and should be offered as a free service. Additionally, your collection agency should provide complimentary services like address checks, litigious defaulter checks, and bankruptcy screenings.

9. Single Point of Contact (Medium Importance)

You should have a dedicated representative as your primary contact. The agency should also provide a centralized customer service number with minimal hold times, in case your representative is unavailable.

By following these guidelines, you can find a collection agency that is well-suited to your needs and operates with integrity and efficiency.

Filed Under: collections

Primary Sidebar

Unpaid Bills? Contact Us

    Please prove you are human by selecting the star.


    Email : support@CollectionAgencyUsa.com
    Ph: 1-844-666-7890

    Recent Posts

    • Texas Businesses: 9-Step Playbook for Hiring a Compliant Collection Agency
    • What HVAC Businesses Need to Know About Hiring a Collection Agency
    • Is It Ethical for Medical Practices to Hire a Collection Agency
    • Collection Agency in Indiana
    • 20 Essential Tips for Doctors Hiring a Medical Office Administrator
    • Hiring a Collection Agency vs. Recovering Debt Yourself: Which is the Better Choice?
    • Expert Guide to Finding the Perfect Collection Agency
    • How a Collections Agency Drives Results: A Case Study
    • Hire a Local Collection Agency in Ohio
    • Collection Agency You Can Trust: 4.9/5 Customer Rating
    • Illinois Debt Collection Agency – Proven Results
    • Debt Recovery Services in Arizona: Collection Agency
    • The Hidden Costs of Uncollected Debt: Is Your Business Bleeding Profits?
    • Will a Collection Agency Recover ALL My Debt? The Reality
    • Collection Agencies: Are Cheap Fees Putting Your Business at Risk?

    Further Reading

    • Commercial Collection Agency: Serving Nationwide
    • Collection Agency Integration for Athenahealth: Get Higher Recovery
    • Why is it Worth Investing in Collection Services?
    • Strategic B2B Debt Recovery: Balancing Efficiency and Relationships
    • 15 Expectations for Medical Practices from a Collection Agency

    COPYRIGHT: BIOTECHARTICLES | 2024 | ALL INFORMATION ON THIS WEBSITE IS FOR GENERAL INFORMATION ONLY AND IS NOT AN EXPERTS ADVICE. VISIT OUR HOME PAGE TO KNOW MORE ABOUT US.