If collections are a part of your responsibility, chances are good that at some point you'll want to hire an outside collection agency. Debt collection is a job best handled by professionals, and since you rarely have to pay a collection agency up front, hiring one frees you up to do other things that are more in the line of business building. But how do you pick the right collection agency? Following are some things to look for.
The first question out of your mouth when interviewing a collection agency should be how they structure their fees. While some of them charge monthly fees, there are many who take a percentage of any recovered money. This costs you less cash outlay, obviously, and it also means they're guaranteeing their ability to perform for you, so this is the kind of agency you want.
Your next question should be if they are members of one of the two professional societies for collections people: the American Collectors Association or the Commercial Law League of America. Membership in these associations indicates a commitment to professional service.
In order to be a member of one of these associations, a collection agency has to act within strict professional ethics and adhere to the Fair Debt Collection Practices Act. In addition, both organizations provide continuing education courses for their members, so a collection agency that belongs to one of these two groups is preferable to one that doesn't.
In addition, collection agencies that belong to professional organizations are more likely to do their own work rather than outsourcing it. This is important because you want accountability regarding your accounts. If you don't know the people who are actually performing the collections you can't really keep an eye on them.
An important way to keep an eye on your collections files when they've been outsourced is online access, so one of the most important criteria for choosing a collection agency is whether or not they offer you online access to your accounts. You want to be able to check on their progress at all times, so agencies that do this are better than agencies who only offer you reports periodically in the mail.
Another criteria for picking a collection agency is whether or not they do their own collections or send out files to other agencies. Those who send out files to other agencies often use offshore call centers, which are mentally easier to dismiss to debtors. In addition, whether or not the contracted third parties are offshore, you have no control over their professionalism. For this reason, you should pick an agency that does all their own collections work and you won't be sorry.
The final thing you should check on when hiring a collection agency is what their business hours are. This may seem like a small thing but with national collections, time zones can be a problem, and with local collections, you still want people working outside of normal business hours. Consumer debtors are more likely to answer the phone before 9 am or after 5 pm, because they're more likely to be home, and also because they believe collections calls are less likely at those times. A collection agency which spreads out its work hours is beneficial to you. - 26221
The first question out of your mouth when interviewing a collection agency should be how they structure their fees. While some of them charge monthly fees, there are many who take a percentage of any recovered money. This costs you less cash outlay, obviously, and it also means they're guaranteeing their ability to perform for you, so this is the kind of agency you want.
Your next question should be if they are members of one of the two professional societies for collections people: the American Collectors Association or the Commercial Law League of America. Membership in these associations indicates a commitment to professional service.
In order to be a member of one of these associations, a collection agency has to act within strict professional ethics and adhere to the Fair Debt Collection Practices Act. In addition, both organizations provide continuing education courses for their members, so a collection agency that belongs to one of these two groups is preferable to one that doesn't.
In addition, collection agencies that belong to professional organizations are more likely to do their own work rather than outsourcing it. This is important because you want accountability regarding your accounts. If you don't know the people who are actually performing the collections you can't really keep an eye on them.
An important way to keep an eye on your collections files when they've been outsourced is online access, so one of the most important criteria for choosing a collection agency is whether or not they offer you online access to your accounts. You want to be able to check on their progress at all times, so agencies that do this are better than agencies who only offer you reports periodically in the mail.
Another criteria for picking a collection agency is whether or not they do their own collections or send out files to other agencies. Those who send out files to other agencies often use offshore call centers, which are mentally easier to dismiss to debtors. In addition, whether or not the contracted third parties are offshore, you have no control over their professionalism. For this reason, you should pick an agency that does all their own collections work and you won't be sorry.
The final thing you should check on when hiring a collection agency is what their business hours are. This may seem like a small thing but with national collections, time zones can be a problem, and with local collections, you still want people working outside of normal business hours. Consumer debtors are more likely to answer the phone before 9 am or after 5 pm, because they're more likely to be home, and also because they believe collections calls are less likely at those times. A collection agency which spreads out its work hours is beneficial to you. - 26221
About the Author:
David P. Montana has thirty years experience as an industry professional, business consultant and published author in debt collection agency services. David provides additional beneficial tips and resources about national collection agencies.
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