Here are 5 things you need to know before hiring a collection agency:
1) Do your Research and Know their Expertise
Know what type of collection agency you are looking for before you begin your hiring process. Some only specialize in specific areas. Example they may only handle retail, medical or certain size business. Just make sure they handle your type of debt.
2) Check out their Credibility .
Depending on the state you are in there can be different regulations for collection agencies. Be sure they are bonded and licensed. You may also want to check out the Better Business Bureau in the area for their rating.
3) Ask them if they have access to Skip Tracing
We would like to think this never happens but some debtors leave town to not be found. A good collection agency will have access to several databases allowing them to locate the debtor even thought there is no forwarding address. Also ask if they use whatever means available for location such as social media.
4) Be sure the Agency is Insured
No matter how much due diligence you do, there is always that possibility that the collection agency uses scare tactics that the debtor feels could be considered in bad faith so you want to know they carry their own insurance
5) Know your Fees – Costs Involved
Now you have found a couple agencies you think might work for your business. Compare their costs. Please note a good collection agency typically doesn’t charge up front. They usually only are paid if they collect.
This is known as a contingency. Typically they will charge anywhere from 25% – 45% of the total due unless otherwise negotiated.
Just remember dealing with debtors can be time consuming, frustrating and emotionally taxing. You or your staff can typically spend your time building business and let the experts do their job at collecting.
MCA is a third party debt collection agency that has been in constant business since 1950. We are rated A+ with the Better Business Bureau and we pride ourselves on excellent customer service along with delivering great recovery rates. There is no cost to you unless we collect! Why not try and re-coop some of your past due accounts with no out of pocket expense?
