Considerations When Hiring A Collection Agency

Law Blog

Debt collection is an essential service for many businesses. After all, business owners do not have the time to chase after bad debtors and run their daily operations. If you need a debt collection agency, below are some tips to help you choose one. 


You cannot authorise an unlicenced individual to collect your debts. If you do, the individual could face legal charges. Besides, they could break the law as they collect the debt. For example, they could threaten the individual or violate their privacy rights as they attempt to recover your cash. Therefore, ensure the collection agency has a licence to collect debts in your territory. It ensures the collection agency understands and follows the law as it recovers cash. Moreover, check whether the agency has certifications. These awards guarantee that the agency offers high-quality services to its clients. 

Success Factor

Your primary objective is to recover your debt. So, vet the agency to ensure it can successfully recover your cash. Start by assessing its reviews on social media and other internet platforms. These reviews will help you establish the customer satisfaction rate and know what the company's process is. You should also assess the company's portfolio. For instance, what is the percentage of collected debts? How long does it take to recover bad debts? 

Assess the interventions deployed by the collection agency during recovery. Typically, the agency should assess your paperwork to ensure that the individual owes you a debt. The agency then conducts background research to establish why the individual did not pay their debt. In some cases, they could have financial issues. In other cases, they could simply be reluctant to repay the debt. After this, the agency approaches your debtor and asks them to repay your debt. In most cases, the two parties draft a repayment contract detailing how the debtor will repay your debt. If they are reluctant, the agency explains the consequences of legal action. For instance, they could lose their assets or business. The agency then makes regular follow-ups to compel the debtor to honour their repayment promise. 


What are the agency's conditions? Your immediate concern would be how the agency prices its services. The rule is to consider collection agencies that work on a contingency fee. This way, the agency has the motivation needed to collect your debt. After all, it does not receive any payment if the debtor does not make payments.  

For more information, contact a local debt collection agency. 


7 September 2022

Unknown laws you might not know

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