As the COVID-19 pandemic forces businesses to close and puts people out of work, more companies are turning to consumer debt collection agencies to recover their revenue from consumers. Unfortunately, not every agency is suitable for consumer debt collection, especially during an economic downturn.
Here are a few signs of an excellent consumer debt collection agency:
1. They Are Compassionate
Regardless of your industry, it’s vital to find an agency that offers compassionate consumer debt collection services during these uncertain times. An ethical debt collection agency will refuse to use the following shady tactics:
Such tactics are bad for your business for various reasons. For one, in the digital age, a single complaint from a harassed customer can go viral and do immense harm to a company’s reputation. For the other, it’s just bad karma to mistreat a consumer during times of economic hardship.
In addition, many underhanded debt recovery tactics are outlawed by the Federal Trade Commission (FTC) in the Fair Debt Collection Practices Act (FDCPA). This federal law regulates the action of debt collectors. Agencies violating the law can be blacklisted, fined, and sued by consumers.
2. They Are Qualified
Always partner with a licensed debt collection agency to avoid legal issues. Remember, anyone engaging in debt collection must be licensed in many states. What’s more, a licensed debt collector can report a debtor to three major credit bureaus. The ability to report delinquent accounts is a significant weapon in any licensed debt collector’s arsenal. If anything, it motivates debtors to clear their dues.
3. They are Very Experienced
It takes many years of experience for an agency to hone its skills and find the right debt collection methods for various industries. An experienced debt collection agency can help you collect your payments even if the account is hard to recover. On the other hand, a new agency may struggle under challenging situations.
For example, an agency needs different strategies to recover debt for a luxury car business than a veterinary clinic. While one account may require sterner methods, the other may need a delicate strategy.
4. They Work on a Contingency Basis
It’s not a good idea to partner with a debt collection agency that demands a certain number of accounts to work with you or demands payment upfront. Unfortunately, many agencies prioritize easier accounts as more difficult accounts collect dust and become harder to recover. Likewise, do you want to throw money after bad debt?
Pick an agency that works on a contingency basis and offers their services whether you have one account or several. An agency that only gets paid when they recover your debt is also more motivated. Similarly, an agency that treats every debt equally regardless of value will give you the best bang for your buck.
These are four signs of an excellent consumer debt collection agency. Select a compassionate, qualified, licensed, and experienced agency that’s is more concerned about recovering your revenue than securing their cut.