Thinking of changing your Debt Collection Agency?
Looking at changing your current Debt Collection Agency?
If you or your Business are currently using a Debt Collection Agency but are unhappy with the results or the way your debts are being handled, it really does pay to know that not all Debt Collection Agencies are the same. A poor performing service can hit your Business hard but it need not be that way so changing debt collection agency is a natural and positive train of thought.
Every week we receive enquiries from individuals and businesses who are unhappy with their current Debt Collection solution so we have put together some pointers that you should be looking for when looking for a New Debt Collection Agency.
Debt Collection Agencies focus on recovering debts that are overdue. They contact your unpaid accounts by phone, in writing, email and a few will visit. In some cases and only when appropriate to do so, they may seek legal recourse on your behalf to solicit payment.
When it comes to collecting payments from difficult customers, a debt collection agency can be a huge help. But choosing the right one to support your business and get the desired results can be challenging.
While there are many reputable collection agencies, there’s a reason the industry has earned a negative image. Some agencies rely on dishonest or illegal tactics to collect money, and that’s something to avoid at all costs, because it reflects poorly on your business. There are strict laws surrounding collections efforts, and any reputable agency will follow them.
Although choosing a reputable firm is important, there’s much more than reputation to think about. You need an agency that fits your corporate culture and provides the kind of relationship you consider important, one that understands your expectations and will partner with you to help you meet your goals.
If you are currently dealing with a Collection Agency that is not getting your desired results and is causing you more stress and money than before, we have put together a guide to help you separate the good services from the bad ones and that you hire an agency that is experienced, professional and familiar with your industry.
Below we have listed factors to consider when choosing a debt collection agency;
Fully Licensed – Do not just search for the ‘cheapest’ agency! A cheap service will likely cause you more harm than good. A service that promises the world with unrealistic claims will likely be unlicensed meaning that it could have detrimental effects on your business and reputation. If you are providing financially regulated services, you need to ensure the debt collection agency is regulated by the Financial Conduct Authority (FCA) and/or is a member of the Credit Services Association (CSA). It is acceptable to ask for evidence of this.
Agencies that have formal accreditations such as ISO:9001, Investors in People etc provide an excellent indication that they are compliant, legal and professional.
Do they have knowledge of your industry? – As any potential Debt Collection Agency will be an extension of your business, do they know how your industry works? As when interviewing a job role candidate; ask questions that are relevant to the task at hand. You would not employ somebody as a sales person if they had no sales experience so the same logic should apply to Debt Collection.
Feedback/Reviews – Check out the feedback/reviews on the company’s website or on Google to see their successes or failures. Google is the worlds biggest library and will offer transparency into peoples opinions that have used their services.
Collection Process – You want results, however, some companies collection process may be to just send an email then com eback to you claiming that some form of expensive enforcement action is necessary. Make sure you find out exactly how will your customers be contacted, how often, and in what way? Keep in mind that the agency are representing your business and could have a terrible effect on your reputation if handled the wrong way.
Services Offered – What sort of debt is your company to recover, are they are the right for you or your business? Make sure you research what services they offer and expertise in i.e. many agencies will offer to track down individuals that have relocated abroad/ and or fled in an attempt to avoid repayment.
Communication – You should always make sure you ask the agency how they will report the progress of the debts being recovered, and how you can get in contact with them should you need to before completing the deal. Many collection companies often supply reports online through a secure account system. This is likely to be stated in the agreement you receive from the collection agency.
Fees and Cost – Once you have found a collection agency that meets your needs you will need to find out what it is going to cost you upon a successful collection. Be absolutely sure of this as we hear horror stories on a weekly basis of people getting charged for things they were not aware of.
Costs and fees will vary with each company. Many collection agencies have a type of tiered pricing structure taking a percent of what they recover, whereas many will charge only if they recover. Keep in mind that the lowest rate does not mean the best results, what is important is the amount of debt recovered as that is the sole objective.
Ask to see the terms and conditions the debt collection agency adheres to before you instruct them to carry out a collection on your behalf or before signing any contracts. In the terms and conditions, the rates for the services should be clearly stated and there should be no ‘hidden charges’.
Conclusion – Choosing the wrong collection agency could end up causing you more stress, time and more money with “hidden fees and costs”, making you feel like you should have just wrote it off as bad debt. It doesn’t have to end up that way by following our simple guide.
Choosing the wrong debt collection agency will be far worse than choosing none at all. At Frontline Collections we make sure that our terms are transparent from outset and maximise the potential of a successful recovery through pro active and accredited practices.