Dealing With A Collection Agency

Step I - Picking A Debt Collector

Selecting a credit collection agency is possibly the most crucial and hard job. Some factors you must consider while choosing a debt collector are:

- Experience and specialists

- Geographical presence

- Proficiency

- Charges and charging design

- Consumer referrals

- Debt Collector Services has covered this topic in depth through different totally free collections reports and short articles on this website.

Action II - Working With the Debt Collector and Establishing Procedures

As soon as you select the collection agency, the first two steps you have to take are:

Enter into a contract with the agency;

Set up processes on how you are going to communicate with the agency.

A contract is the legal document and your legal experts will, obviously, prepare it correctly. Just ensure that you include essential provisions such as confidentiality and non-disclosure. You are likely to pass sensitive information to the collection agency such as your account receivables, customer contacts, services and product prices, etc. to facilitate faster debt collection. You want to be sure that this information does not fall in the wrong hands.

Setting up procedures is a crucial step in handling the debt collector. The success or failure of your collaboration will depend a lot on how distinct your processes are and how strictly they are followed. Essential processes you need to specify are:

Internal procedures: You need to put in place a clear process on defining bad debt and referring the case to the collection agency. You do not wish to refer the case to the collection agency before you make a sincere effort to collect the charges internally.

Details transfer: How will you move the info to the collection agency about your dues and defaulting consumers, and how will you get the info from your debt collection agency? Debt collection software can make the details transfer procedure easy and secured.

3rd party dealing: As pointed out earlier, it is extremely important for you to ensure the security of the details you offer to the debt collection agency. The collection agency might utilize one or more of its involved firms to get information about defaulting consumers. You need to set up a clear procedure on how much details they can share with such third parties.

Interaction: You need to establish single point contacts for interaction within the company and the collection agency. In debt collection practices, the timing of interaction is incredibly important and for this reason it will go a long way in deciding the success of your debt collection procedure. Once again, the importance of debt collection software application can not be overemphasized here.

Step III - Efficiency Monitoring

As soon as all processes are set, start keeping an eye on the performance of the debt collector. When dealing with a collection agency, this is an ongoing procedure. Essential parameters to keep an eye on are:

Quantitative

- Number of cases described the credit debt collection agency and portion of cases successfully fixed by them.

- Percentage of debt recovered by the debt collection agency from all cases referred.

- Percentage of debt recuperated by the collection agency from fixed cases.

- Percentage of quantity paid as fees/commission to the collection agency to the total uncollectable bill cases referred to them.

- Typical number of days taken by the debt collector for full/partial credit collection.

Qualitative

* How well do the collection agency specialists deal with your customers?

* Has the debt collector followed all legal requirements discussed in the Fair Debt Collection Practices Act?

* Has the debt collector exceeded the arrangements of the Fair Debt Collection Practices Act?

* Has the collection agency followed all standards and processes set by you?

Step IV - Agreement Closure

Hopefully, the chosen collection agency will work best for you. But if it does not, then you need to move all your debt collection procedures from the agency. You need to remember the following crucial points when you are ending the contract:

Confidentiality and non-disclosure stipulations are applicable after completion of the contract with the debt collection agency along with its employees. The debt collector returns all documents associated with your organisation and destroys all info related to your organisation from their data storage.


You are likely to pass delicate information to the collection agency such as your account receivables, client contacts, item and services rates, etc. to help with faster debt collection. Setting up procedures is a very essential action in dealing with the collection agency. The collection agency might use one or more of its associated firms to get details about defaulting customers. In debt collection practices, the timing of interaction is exceptionally important and thus it will go a long method in choosing the success of your debt collection process. If it doesn't, then you need to move Zenith Financial Network all your debt collection procedures from the agency.

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