When your collection process has reached its end and the bill remains unpaid, it’s time to turn the process over to a collection agency.
Choosing a collection agency to manage your delinquent accounts can be a tough decision. You want an agency that will represent your office in a professional manner. You want an agency that provides a satisfactory rate of recovery while not tarnishing your reputation with customers. And you want one that can implement your special requests.
Many companies make the decision to use an agency based solely on price, as if collections is simply a commodity. Like most things in life, you get what you pay for. Don’t let price be the main reason you pick an agency.
Here are the basic services an agency should provide and qualifications you should seek.
- Call center that is PPMS Certified with ACA-certified collectors with ACA and PPMS-trained collectors.
- Ability to send customized notices based on customers’ situations.
- Skip-tracing services to locate consumers when they can no longer be reached at the address or telephone numbers that were given to you on the date of service.
- Credit Bureau reporting.
- Attorney services to pursue litigation if needed.
- Account managers to answer your questions.
- Various methods to submit accounts (fax, email, electronic submission).
- Online system access for both debtors and clients.
2. Market Knowledge – Make sure the agency has the skills and knowledge needed to successfully collect on your accounts. For example, healthcare, banking, utilities, finance and education all have their own regulations regarding collections. Make sure your agency understands your market and can comply with its unique rules and regulations.
3. Recovery – The recovery rate is what is most important. When you ask about what the agency expects in terms of a recovery rate, listen carefully. If the sales representative quickly gives you a percentage without asking several questions first, you might want to consider another agency. No two organizations are the same. Clients in the same industry just down the street from one another can differ dramatically.
4. Procedures and Policies – It’s important for you to feel comfortable with your collection agency. After all, they are representing your company. Make sure to ask about the following:
- What policies and procedures does the agency use to collect from the moment it begins work on your account?
- When does it begin work on an account?
- What do the collection letters say?
- How do they train their employees?
- How do they make sure they’re operating in compliance with the Fair Debt Practices Act (FDCPA), which is critical to third-party debt collections agencies.
5. References – What do clients have to say about working with the agency? Try to contact a least two creditors in your industry currently using the agency’s services. Find out if the arrangement is successful and how satisfied clients have been with the services they’ve received.
6. Professional Credentials
- Does the agency comply with all state licensing and bonding laws, if applicable? If licensing or bonding is not required in your state, find out how long the agency has been in business. Experience is often a good indication of quality.
- Is the agency a member of state or national trade associations such as ACA International (the Association of Credit and Collection Professionals)? Members of ACA agree to comply with all federal and state laws and regulations, as well as the ethical standards and guidelines established by the association.
- Are the collectors PPMS certified? Check to see if they are certified under ACA International’s Professional Practices Management System – the association’s gold standard for collection procedures, client services and compliance. It includes a commitment to SSAE-16, ISO and 18 other criteria. Certification also includes a third-party audit system, which helps us correct errors and remain in compliance. Fewer than 2 percent of the world’s collection agencies are PPMS certified.