How to Find Legitimate Collection Agencies
Collection agencies are an excellent option for small businesses that have past-due accounts. These agencies are available for any size or type of business and can handle any debt. However, not all collection agencies are the same. Some specialize in B2-B companies while others are consumer-focused. To find the right agency for your business, consider the size of your customer base and the type of debt you have. Alternatively, you can also hire a collection agency with specific experience in your industry.
Before hiring a collection agency, check their qualifications and ask about the tactics they use. Ask them how many clients they have successfully recovered, and check their references. You also want to make sure that their representatives are experienced negotiators and trained to handle any situation. Make sure to ask how frequently they update their skills. If they aren’t, then that’s a red flag. Lastly, consider their cost. Most collection agencies charge around $50 per hour for their services, so choose a company that charges a reasonable rate.
Many collection agencies employ technology to recover the money they owe. Skip tracing and artificial intelligence can help find hard-to-reach debtors. Many of these collection agencies also have online portals where clients can add new accounts and track their status in real-time. Collection agencies that use illegal practices can be subject to litigation if their methods are unethical. There are several risks to hiring a collection agency. One of the biggest risks is the damage to your reputation. By avoiding these mistakes, you’ll prevent the risk of losing potential customers.
The best collection agencies will evaluate the chances of success before moving forward with aggressive collection efforts. Most collection agencies carry thousands of delinquent accounts and will only pursue those that will bring them the highest profit. But if there is little chance that you’ll be able to find the debtor, a collection agency might give your account a lower priority. Even if you don’t believe the agency is legitimate, it will still pay you 4 cents on the dollar.
The fees that collection agencies charge are based on the age of the debt. Generally, the longer an account is, the higher the fees are. Furthermore, they charge by the number of communications they send to you. For example, a debtor may receive several phone calls or letters per week. The number of communications will depend on the age of the account. The collection agency may send emails or texts to the debtor. If the account is old enough, it may be possible for them to continue to charge the debtor’s credit card balance.
Since this industry is governed by the Fair Debt Collection Practices Act, it’s imperative to find a collection agency that’s certified by the Commercial Law League of America (CLLA). It’s important to note that COVID-19 is only applicable to consumers and small businesses. The Commercial Law League of America (CLAA) is a group of collectors whose members must abide by a code of ethics, follow proper accounting practices, and be bonded.