Know Your Basics about Working with a Debt Collection Agency

Once you have made up your mind that you will avail a collection agency service, to settle your accounts and close the books of old debtors you need to know how to work with them.

Your first step will be to list the accounts that are to be recovered in the debt collection agency’s form manually or load it electronically on their set format. Try to provide as much accurate data as possible to improve the amount recovered.

The minimum data that are required to be supplied to your debt collection agency are:

• The accurate name, address and telephone number of the debtors
• The name of the debtors’ closest family- in most cases, the spouses.
• The information about any mail that has been neglected and/or returned.
• The occupation of the debtors and their spouse and their job phone number.
• Any referring names of family, friend, neighbors of the debtors.
• A brief about any disputes, written or verbal
• The date of last payment, if any, the order date and the due date of payment.
• Additional contact numbers -mobile phones, fax, etc.
• Any other known names of the debtors -nicknames and aliases.

All the information is supposed to be with you, when your customer signed for a credit application.

Any specific notes that you have kept regarding any of the errant customers should also be supplied.

The debt collection agencies need you to cooperate on this matter, for making their task and your recovery easier. Most of these agencies have the knowledge and skill to get you favorable results. Getting them aware about the nature of your business and its dealing is also essential.

Some of the collection agency services are specialized. They only deal with business that is governed by certain laws of the state. If your business or service falls under these categories, it is essential that you find a debt collection agency, which is specialized in the particular field.

Do not allocate a single account to multiple agencies. If you decide to change your debt collection agency make sure that they do not have any of your account lying with them. Since the payment of these agencies is made after your debts have been recovered do not expect very quick results.

How do the debt collection agencies get paid:

Some of these agencies charge a monthly fee, while some charge per call. But most of the agencies charge commission on the basis of the amount recovered. This commission varies upon the “collectible” factor of the debt. If an account is 60 days old and the debtor is easily traceable, it is likely that the debt can be recovered easily. 

In such cases generally 25% of the amount is charged as commission. Accounts that are smaller in amount, but are aged more than a year, are likely to be charged more. If there is a steady flow of accounts every month the debt collectors charge a flat rate of 18% on all recovered amounts.

Some of these agencies also offer additional services at a flat rate that does not depend apart from deb. You need to ask each agency you contact about any such additional service that they provide.

There are multiple debt collection agencies working all over the U.S. Check their websites and the tally with the type of collection agency services that you are looking for. You will find a perfect agency that is best suited for your purpose and your business.

About Author: Rob Sanders, the owner of an audit firm discusses the best ways to work with a debt collection agency. He clears some of the doubts regarding their payment structure for debt recovery and other collection agency services.