Five Tips for Hiring a Debt Recovery or Debt Collection Agency

In order to deal with stubborn defaulting customers, you have to hire debt recovery agencies to do your firm’s bidding. With this said and done, it’s important to keep in mind that the right steps are taken to onboard the most appropriate debt collection agencies, so that your business does not take a negative hit in the long run. Here are some steps you can undertake to ensure you hire the right debt recovery agency for your business.
  • Do proper research: Research is key, especially when you want to hire the right debt recovery agency. During the research stage, you can check the agency’s debt collection process, so that there are no loopholes in the future. Once you are satisfied with their ways and means of collecting money, you can rest assured the agency would collect money in the right manner from your customers.
  • Ask yourself, “Is the agency legitimate?”: If you are hiring an illegitimate agency for your company’s collection process, then you might get into legal implications later on. This might mean that you end up on wrong side of the law, as your customers’ might sue your business for harassment. Make sure the agency you hire is legally handling the collections process.
  • Check with the agency if they use “Skip Tracing”: Debtors often tend to run away, when they are faced with the challenges of owning up to their debts. In such cases, good collection agencies own several databases, which help them track people who are on the run. This way, your business can have a sure shot way of being able to recover money from all types of errant customers.
  • Insurance goes a long way: Collection agencies use a series of methods to collect money. Sometimes, these methods might come across as crude, which might make the debtors feel as if the collection agency acted in bad faith. In such circumstances, the customers can sue the collection agency as well as the business getting the money collected. In order to avoid such situations, you should ask the debt collection agency to provide insurance, which can help you steer away from any potential law suits.
  • Take fees and contingency costs into consideration: Once you have zeroed down on a few agencies which fit the bill, you need to compare costs and see which agency is offering the most economical services. There might be different types of costs which can be included in the list of services. In order to arrive at the right costs, make sure you pre-empt any possible contingencies which might arise during the collection process. This way you would not have any untoward surprises in the future.
Post the hiring phase, you need to remember that you would never get the full collection amount from the agencies. For this very reason, it’s important to highlight that your business should exhaust all possible sources of collections, before hiring a debt collection agency to do your bidding.  

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