4 Tips For Hiring A Debt Recovery Firm
It happens in every business and in every industry – debt recovery. Clients and customers pay invoices late and even former employees might fail to pay back overpayments to them. You’ve called. You’ve emailed. You’ve sent letters through the post. Nothing works. It’s at this point that businesses should begin considering turning to a debt collection firm. These firms specialise in getting the money that needs to be paid. They understand what works and what doesn’t. However, because of the vast number of debt collection firms on the market, it can be difficult to find the one that’s right for you. The following are a few, (hopefully unbiased) tips to guide you through this process:
Before any decisions are made, it is wise to complete a little bit of due diligence. Debt collection firms may look like a good fit for your organisation at first glance, but once you dig a little deeper, you’ll see that they might not be exactly what you’re looking for. Look into what industries the firm specizalises in, or at least has experience in. If they’ve never worked with companies that are in your sector, they may not have practice speaking in the terms that are most appropriate for your industry. In other words, you want the firm that you work with to maintain your public image, as well as bring in a satisfactory rate of debt recovery. You should also explore whether the firm mainly works with commercial or consumer debt, what size businesses they typically work with, and if they have experience dealing with the type of debt associated with your industry. You should also look into size. Some firms are made up of just one individual while others are large corporations with thousands of employees. Bigger firms can typically handle bigger and more debt recovery cases. Just be sure that they aren’t too big, leading to a poor personal business relationship and poorer quality service. As long as they can handle your case load and utilise state of the art technology, you can be more secure in the firm’s financial stability, scalability, efficiency, effectiveness, and customer service. Finally, before you make a decision on a firm, be sure to look at their history. The longer a company has been around, the more experience and success they’ve likely encountered. This experience indicates that they provide good returns, understand the regulations in your industry, and are familiar with various collections procedures. They probably have a system in place for their collections that has been slowly perfected and will reliably achieve the results that they promise. Another beneficial aspect of a collections firm with a history is that they know how to adjust to regulatory and technological changes without disrupting their current operations—meaning no surprises for them or for you.
2. Contingency Costs And/Or Fixed Fees
It’s never a wise choice to go with the cheapest firm. What you pay for is generally what you’ll get. The best case scenario with low-cost firms is that you won’t get much of a return. The worst case scenario is that your reputation will take a hard hit. But when looking at a firm’s fees and costs, you need to dig a little deeper because how agencies charge for their services can differ. Some firms will have a contingency fee. In other words, if the firm doesn’t collect the debt then they won’t charge you. If they do collect the debt, they’ll generally charge a percentage of the amount collected. It’s also important to remember that a firm may not have a set contingency fee. The fee could change over time based on how old the account is, how many debts have been collected, and more. Other firms may provide fixed fee debt collection services. This usually starts with a small fixed fee for a letter before action… Some firms offer options to be charged either a fixed fee or a contingency fee. The choice would be yours.
3. Review The Process
To ensure that the firm is a good fit for your debt recovery needs, you should take a look at their practices. Do they start small and then expand their efforts? This would look like sending letters and making phones calls. If no progress is made, a transition to legal proceedings is made. The use of tracing is also a good indicator of how effective the firm’s collection services will be. This method enables them to find debtors who have moved addresses and changed phone numbers. It can also be a good idea to see if there are any testimonials or recommendations from businesses that have used their services before. This is a perfect way to understand how their practices could affect your reputation. It’s best to partner with an agency that avoids harassment, using profane language, or calling at inappropriate times of the night or morning.
4. Check For Insurance, Licensing, And Compliance
You don’t want to work with a firm that isn’t compliant with national regulations. This includes fair practices, telephone consumer protection practices, medical collections privacy practices, proper licensing and more. But to cover all of your bases, you should check to see if they are insured and regulated.
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