If you are owed money, you might be able to collect the money on your own as most customers are not taking on a debt with the intention of defaulting. However, sometimes you have no choice but get professional assistance from a reputable agency like Brennan & Clark. Here are some things to consider when you are choosing an agency to help recover money that is owed to you.
Find the Right Match
Some agencies specialize in collecting debts within certain industries, or from individuals rather than from businesses. This can be significant because certain industries (like telecommunications and healthcare, for example) have special regulations. With a bit of research, you should be able to identify an agency that matches your situation. This not only applies to the kind of debt that is being recovered, but also to the size of the debt – some agencies specialize in smaller amounts, and others in larger amounts. The age of the debt is another factor to consider when selecting an agency – collections of new debts vs old debts can be quite different.
Make Sure the Agency is Insured and Fully Licensed
Selecting a reputable agency is an important first step to make sure that your debtor is not harassed. However, a debtor may nevertheless claim to have been treated unfairly by the agency. Ask about Errors and Omissions Insurance. It is also important to make sure that the agency you select is fully licensed in your state and is bonded. Different states have different rules that agencies must follow.
Transparent About the Process
Be sure that you fully understand the procedures that the agency will follow as part of the collections process – how, and how often will they contact the debtor? Will they provide regular reports and updates? Are they open about discussing their compliance training? Make sure that their practices are in keeping with the way that you want to be represented – after all, when you hire an agency to collect debts, they are doing so on your behalf.
Fees and Recovery Rates
Collection agencies almost always work on a commission basis, which means that they will keep a percentage of debts that they recover. In order to evaluate the fees that you will pay (and also the portion of the debts that you will recover), you need to take account not only of the fee, but also the agency’s recovery rate. If you are owed $100,000, an agency that charges a higher fee but recovers a higher percentage of that amount may be a better option than an agency that charges a lower fee but also recovers less of the debt. Some companies may also buy the debt outright for a set amount – this will be less than the value of the debt, but it also means that you are basically done with the process at that point.
If you find yourself in the position of having to hire professional assistance to recover debts owed to you, be sure to do your homework to find the best company for the job.