Finding the Right Collection Agency
Total household debt rose by $109 billion to reach $17.80 trillion, according to the latest Quarterly Report on Household Debt and Credit from the Center for Microeconomic Data. In every sector, people are failing to make payments on their debt.
Unpaid obligations can be detrimental to any organization. It can negatively affect your cash flow, impact your operating margins, and have a detrimental impact on your overall bottom line. Perhaps you need to consider working with a collection agency that will serve your best interest all while protecting your good reputation. The following items must be considered when making that decision.
Importance of Customer Service
It is essential to work with a company that provides both clients and consumers with good customer service. This includes quick and responsive turnaround of requests by having experienced Account Representatives who answer the phone and handle any ongoing needs or issues. Things to consider or ask a prospective collection agency might include: what is your average hold time, what is your typical timeframe to follow up on voicemail or e-mail requests, what are your hours of operations, do you have bi-lingual Account Representatives and are consumer complaints handled properly. While the Fair Debt Collection Practices Act outlaws any threating or abusive behavior by Account Representatives to consumers, there are many important aspects of customer service overlooked by some collection agencies due to lack of training or the overall experience of their staff.
Why Recovery Rates Matter More Than Price
When looking for the right collection agency for your organization, don’t just compare and go with the lowest collection fee. In fact, you should focus on the overall recovery in actual dollars they collect on your behalf which translates into more money back to our organization or more “net back” dollars. In fact, industry surveys have found that higher contingency fees charged by collection agencies typically produce a higher overall recovery rate and thus increases your bottom-line revenue or overall rate of return (ROI). Choosing the lowest cost provider is not the best criteria to use when selecting a collection agency since this will often result in a poor recovery rate. The main reason for this is that as agencies charge a low or unsustainable fee, they are not able to put the necessary resources in place to maximize collections for you. So, when comparing agencies, it is important to focus on over net back dollars they return for you and not a collection fee they might charge. Integral Recoveries has created an in-depth explanation on maximizing your organizations net back dollars and provides examples of how the lowest cost provider typically produces the least amount of return to you. Click Here to Learn More
Protecting Your Reputation
Your reputation or brand can be positively or negatively affected by the actions of a third-party business partner. A collection agency will contact customers on your behalf and act as an extension of your organization. The way they treat your customers could have an impact on your organizations brand or image. That is why it is vital to choose a collection agency that is both reputable and professional. In many cases it often starts with the collection approach they use when dealing with your customers or consumers. For example, the importance of a consultative collection approach where the Account Representative reviews the individual’s situation and goes over payment options to assist with account resolution. This approach has shown to lead to more phone conversations and a higher correspondence rate. Effective communication with consumers is the key to provide clients with a higher recovery rate. It is also important to find out if the collection agency operates in a complaint manner. Will their services be performed in accordance with all federal and state laws and regulations? Many states have specific laws or regulations, and it is important that a collection agency is familiar with all of them. Does the collection agency maintain an “A+” rating and is an accredited member of the Better Business Bureau? Are they committed to resolve customer complaints or disputes? Have they had any court-litigated actions filed against them or have they had any clients terminate their services early? These are all factors that should be considered when looking at different agencies.
Technological Benefits Offered to Clients
It is important to ask what type of skip tracing technology a collection agency uses to help locate hard to find consumers. Having good contact information will allow more conversations with consumers which ultimately leads to greater payments. This is critical if the agency is going to be successful collecting on delinquent accounts. Does the agency provide an online payment portal that consumers can access securely 24/7 to enhance the ease of making payments? A recent industry survey has shown that 73% of consumers prefer to make payments on-line versus over the phone or via mail. Does the agency provide clients on-line access to their accounts? This allows for full for transparency and an accounting of activities and provides the client with real time account status on placed accounts. Are they able to produce standard or customized reports for clients that will provide performance, activity, and statistical information? This will provide the client with overall performance indicators so you will see if they are doing a good job for you.
Other Factors to Consider
Ask if the agency takes ownership of the entire collection process from beginning to end. Many larger agencies either outsource parts or all their services to third parties and will sometime have offshore call centers located abroad. Ask what measures they have in place to operate securely and protect your confidential data. A data breach or a database hack could have devastating consequences to your organization. Does the agency have the ability to collect nationally? Being licensed and able to collect out of state is important especially now post pandemic since a large percentage of people have been relocating.
Integral Recoveries has been providing effective accounts receivable management solutions since 1995. Our mission is to resolve past due accounts utilizing state of the art information gathering, effective negotiations and persistence. We take a strategic approach to debt recovery and every account is researched thoroughly by experienced professionals in order to take the most effective course of action. Contact us if you would like to learn more about our services.