Total consumer debt in the United States is now over $4 trillion, while the average American household owes over $8,000. Credit card debt is rising, and more Americans are defaulting on their payments. In this climate, businesses like yourself are turning to collection agencies to recover revenue from delinquent accounts. With your costs rising and your competition stiff, you know that every penny is important.
But with over 4,000 collection agencies in the United States, your company may struggle to pick the right one. Here are some characteristics of a good debt collection agency:
#1 They Will Get the Job Done:
You should get help recovering lost revenue from a collection agency that can get the job done. Ask them about their track record. Some of the best collection agencies boast twice the national recovery rate. Because debt grows harder to recover with time, it’s important to make the right decision.
#2 They Will Get the Job Done the Right Way:
Certain agencies use underhanded tactics to recover payments from a customer. They may harass, abuse, threaten or blackmail a client into intimidating them. Others may misrepresent themselves as law enforcement to scare clients, visit their family or employers to humiliate them or use robocalls in the middle of the night to deprive them of sleep.
While such agencies are in the minority, it’s best to avoid them because their practices are unethical and illegal. Such debt collectors have been fined, sued, and blacklisted by the government. Associating with them is bad for your reputation and your business.
Instead, partner with an ethical collection agency. Ask about their policies. Instead of shady tactics, they will recover your revenue through official demand letters, skip tracing, skilled negotiation, and credit bureau reports.
#3 They Will Be Reputable
A good debt collection agency will be affiliated with renown collection agency associations that promote ethical values in the industry. They may also be rated highly by organizations like the Better Business Bureau (BBB). Also, they’ll be well-reviewed by their clients.
It’s also a good idea to find a debt collection agency that has decades of experience. Newer agencies that don’t have experience recovering debt in your industry may not be as effective.
#4 Their Rates Will Be Reasonable
Some collection agencies will not work with you unless you pay their fees upfront and guarantee them a certain number of accounts. Working with them can be risky, because they may prioritize your more lucrative accounts and ignore the rest.
Partner with a debt collection agency that will work with you on a contingency basis. They should only get paid if they recover your revenue. Also, their rates should be transparent and reasonable.
#5 They Should Offer Excellent Customer Service
Your debt collection agency should be professional, friendly, and resourceful. They should be familiar with local laws in case your customer has crossed state lines. Moreover, their website should offer a secure online portal that offers timely reports in real-time.
These are some characteristics of a good debt collection agency. Take your time to partner with the right one to ensure that you recover your money in a fast, effective, and ethical manner.