The following are tips to consider to ensure that the collection agency you hire is a good one:
#1 – Paying less isn’t always a good thing. According to Forbes, “You get what you pay for” is often overlooked when hiring debt collectors and this can lead to lackluster results (best case) or significant damage to reputation (worst case).”
#2 – Are they licensed? A licensed agency is up to date with all laws, regulations and licensing requirements. Unlicensed activity by a collection agency is open it to devastating law suits filed by either the state or the consumer. As a creditor, you can be sued right along with them.
#3 – Do they carry an indemnity bond in the state your customer is in? Having an agency collect your money is only half the battle; collecting your money from the agency is the other half. Surety bonds are designed to guarantee performance in the face of a set of particular risks, and the right agency should carry a $150,000 minimum bond.
#4 – What is their collection process? The right agency will have extensive conflict resolution and negotiation training. They will send investigators to the debtor’s business or home and have access to sensitive information not available to the public. A good agency knows the difference between passive and aggressive tactics and when to apply them.
#5 – Are they 1 of 35 of 4,000 agencies who are certified by the CCLA/IACC? This stringent program requires re-certification every two years and is one of the hardest certifications for a commercial Collection Agency to obtain.
Only agencies that possess the requisite experience, licensing, bonding and insurance are IACC/CLLA certified. Certified agencies must adhere to all pertinent government regulations, use generally accepted accounting principles, and follow established best practices to protect their clients’ money.