Author Archives Marilyn Miller

Hiring a Debt Collector: Five Perks for Your Business

Posted by Marilyn Miller on February 22, 2019  /   Posted in Uncategorized

Hiring a debt collector is a smart move for a small business. Certainly, having a relationship with a good small business debt collection agency will bring money back to your business and help you grow. There are, however, more benefits you can receive from hiring a collection agency.


As a small business owner, you are busy wearing many hats. It is very easy to lose focus on the money owed to you when you are working to gain new business and service your customers. A debt collection agency’s job is to focus, everyday, on your accounts receivables and on getting you paid.

Time – Collecting money takes time. All business owners need more time. Let a commercial debt collector help you so that you can spend your time growing your business.


The internet, especially social media, provides a good deal of information on people. However, debt collection agencies have specialized tools and can take research to the next level. They specialize in finding people and their assets. The process is called skip tracing and it is critical to successful debt collection.

Conflict Resolution 

Customer disputes can be a big distraction. When you outsource your debt collection, you get yourself out of the middle. The best debt collector will help separate valid disputes from bogus ones, and get you involved as needed.


Find an agency that can assist you with improving your credit practices. Look at your business debt collector as your consultant or coach when it comes to your day to day credit interactions with customers. Your collection agency understands small business credit and can help you structure payment plans that give you a competitive advantage.

Hiring a debt collector can send a message to your customers that you are serious about getting paid. Time after time, we have seen delinquent customers sent to collections get serious, pay their bill, and become a customer again.

Hiring a debt collector is hiring a valued business partner. You must work along with them to get the best results. You will be happy you did.

Credit Bureau Reporting: How it Impacts Debt Collection

Posted by Marilyn Miller on February 20, 2019  /   Posted in Uncategorized




Credit bureau reporting and debt collection are not the same thing. Reporting delinquent debts to the credit reporting agencies Equifax, Experian and Transunion is one of the tools that can be used to help collect a debt. Many people believe it to be the most important thing a collection agency can do for them, but it is only one tool. And, in my opinion, many collection agencies rely too heavily on it. Let me explain.

Not getting paid stinks. It is an insult and a betrayal of trust. Although it is a business issue, it feels personal. You are angry and call a collection agency to help recover the money owed to you. The first thing you tell your collection agency is that you want the debt reported to the credit bureau because you do not want your customer to “get away with it”.

There is a huge problem with that type of thinking. Your customer has already gotten away with not paying you. You have nothing – zero. So instead of focusing on getting back at the customer, focus on recovering as much as you can.

This is where the collection agency comes in. Ask your collection agency what they will do to recover for you. If credit bureau reporting is the first thing they tell you, it likely means that is pretty much all they are doing. Perhaps they are sending a letter and making a few calls, but after a month or so, the debt is parked on your customer’s credit report and nothing new happens.

So does credit reporting actually help collect a debt?

It can motivate your customer to pay the bill so as to avoid the impact to their credit score. Also, there is a chance that even if your customer does not care about their credit score today, they will at some point in the future. Federal and state laws vary on how long debts can be reported, but the “future” could be years from now though. How long do you want to wait? What is your collection agency doing in the meantime?

I was speaking with a small business client this morning regarding a person who owes $3,200. My client asked me to report the debt. I said I would be happy to do so, but I told her that the person already has a 450 credit score with many small collections. One more is not going to make much difference, and it has not motivated this individual to come to the table on those other debts. I suggested we keep working to reach her, and get her into a payment plan.

In my experience, most people sent to collections are not primarily concerned with their credit scores.

It may be an issue, but it is not the most important issue. The most important issue, the one we hear again and again, is the  inability to pay. Therefore it makes sense to work with people and get them into affordable payment plans, rather than punish them for something that may be totally out of their control. Even for those customers that intentionally stiff you, your focus should not be on getting even with them. Your goal, and the goal of your collection agency should be to recover as much money as possible. It can be done without credit reporting. I know – I have been doing it for 14 years.

As of July 1, 2017, credit reporting agencies must  remove many debts that did not have key identifying information on such as social security number and date of birth. Going forward, if do not have complete information on customers, the credit bureaus may be unable to accept reporting. The impact of medical debt on a credit score has also been minimized So an active plan for recovery becomes even more important.

Credit reporting and debt collection, therefore, are two distinct things. One is a tool that may or may not work, and the other is a process – an action word. The actions you and your collection agency take will make the difference in getting you paid.

Collection Agency: Are You Helping or Hurting Them?

Posted by Marilyn Miller on February 18, 2019  /   Posted in Uncategorized

If you want the very best results from your collection agency, there are many ways to help. However, not every action is helpful, and some can actually hinder your collections agency’s efforts.

Helpful: Pass along new information.

A client recently called me to let me know that they had seen one of their customers driving a company truck. We had a judgment against the individual, and when the customer provided the information, we were able to use it to verify employment and move for a wage execution, which convinced (finally) the debtor to call us and work out a payment information.

Pass along any all information you receive, whether or not you believe it is important. You will be amazed what a collection agency can do with a little bit of intelligence.

Harmful: Continuing to provide service to customer once the file has been sent to collection.

Once you send a customer to collections, you must discontinue seeing them. Consider how it appears to your customer if a collection agency is calling them for an old balance, but you are allowing them to come to your office and giving them even more credit. The mixed message sets your collection agency up for failure.

Similarly stop sending bills once you send a customer to collections. The agency will dun your client, and should be the only “voice” they are hearing.

Harmful: Pulling files from your collection agency.

Imagine this scenario. A customer avoids your for months, so you send them to collections. A short time later, the customer calls and begs you to “take them out of collections”, and promises to pay if you do. You pull the file from your collection agency and set them up on a payment plan.

Remember that a collection agency works on a contingency rate, which means they charge no money upfront, but get paid only when they get results for you. So, if you pull a file that clearly is only offering to pay after receiving a collection notice, you are showing the agency that you do not respect their work, and are not interested in a long term relationship.

Also, every single time this has happened to us, we have seen the file come back to us, because the customer makes a few payments then defaults. They are calling you because the collection agency contacted them, and the agency should see the process through.

Now, if a customer calls you or comes to your office and wants to pay their bill in full, take the money. However, any payment plan or dispute should be referred back to your agency. They are expert at setting up payment plans, and keeping people on track with those plans.

Harmful: Telling the collection agency how to do their job.

Imagine someone telling you how to run your business. It is no different for a collection agency. Last week, a customer sent me some information from a generic website to “prove” to me that I could charge a usurious interest rate on a judgment. He was not happy when I sent him the actual Maine law that allows only 8%.

Helpful: Reporting direct payments promptly.

If a customer pays their bill, let your collection agency know immediately. You do not want the collection agency continuing to contact someone who has done the right thing.







FDCPA: A Good Law Not Always Used in the Best Way.

Posted by Marilyn Miller on February 15, 2019  /   Posted in Uncategorized

The FDCPA, or Fair Debt Collection Practices Act is a federal law that governs the behavior of third-party debt collectors attempting to collect consumer debts. It details abusive, misleading and unfair practices, gives guidelines for debt collector communication. It assigns civil penalties for violations of the law. There are also state versions of the law, based on the federal model.


The FDCPA is a very good law. Consumers need to be protected from unprofessional collection agencies. Just google “collection agency scam” and you will find a host of horror stories. Some of the news reported is not done by collection agencies, but people trying to scam seniors pretending to be the IRS, and so forth. Nevertheless, there are bad collection agencies out there – just as there are bad players in every industry. There are also many reputable collection agencies working hard to return money back to business owners and keep the economy flowing.

Collection agencies have made significant changes to their hiring and training practices to comply with the FDCPA. These changes have helped consumers. It is my opinion, however that the law is not always used for the best of purposes. Let me give you an example.

Years ago, we received service of an FDCPA lawsuit. The plaintiff was an inmate in federal prison in Pennsylvania, alleging violations of the FDCPA for debts from various credit cards when the plaintiff lived in Massachusetts. Now, I have never worked or lived in either Pennsylvania or Massachusetts and I have never collected consumer credit card debt. The plaintiff’s name was not in our database. So naturally, I knew the suit was baseless, but since the suit had been filed, I had to respond. Several other local agencies were also named in the suit, and I called two of them. I was horrified to learn that even though, like me, they had never attempted to contact the plaintiff, and knew the suit to be a scam, they had decided to pay the amount demanded – $2,500.

Why? Simple economics. You see, when a business is sued, the business owners cannot represent the business. They must hire an attorney to represent them in court. The cost of hiring an attorney might well exceed the demand amount. They considered the payment a cost of doing business. Well – not me – I never pay ransom!

I contacted the prison authorities who referred me to the FBI. As luck would have it, I had a relative who was a Pennsylvania-admitted attorney, so I was able to get a letter done for free, but I would have paid an attorney, just to make sure the scam was exposed and ended.

The inmate lawsuit is an extreme example, but there are also examples of collection agencies being sued for minor violations such as one word being left out of place in a letter. Some court decisions have been totally contradictory – such as one court ruled that agencies must leave certain language in a voicemail and another court finding that same language to be disclosure of the debt to the third party, which is prohibited by the FDCPA. In some cases, the attorney gets a large award for fees, while the consumer gets only a few thousand. Still others might use the FDCPA to get out of paying the debt – not at all what it was intended to do!

Penalizing agencies for hyper-technical violations takes time and energy away from prosecuting the bad players. Consumer collection agencies walk the “damned if we do, damned if we don’t” tightrope.  Just as unscrupulous agencies ruin it for the good ones, bad litigants ruin it for those who need protection.  Many agencies no longer collect consumer debt. Third party agencies return over 50 billion dollars back into the economy every year. We know you love to hate us, but if we don’t get businesses paid, then businesses cannot grow. Prices go up. Employees are laid off. No one wins!

Hiring a Collection Agency: How to Get it Right

Posted by Marilyn Miller on February 13, 2019  /   Posted in Uncategorized

Hiring a collection agency might be the best business decision you make all year. If you get it right, you will save time and improve your cash flow. How DO you get it right?

The first thing you need to do is determine your collection goals beyond simply getting paid. Do you want to keep these customers once they have paid, or are you done with them? 

Once you have set your goals, here are some factors to consider:

Experience and personality

How long has the agency been in business and what experience do they have collecting for businesses like yours? How does the agency approach your customers. If your goal is to get people to pay you and then keep them as a customer, you will want a very different approach than you will for customers who you have sworn off ever working with again. An agency may be able to handle both types, but it is important to communicate your goals and determine what appetite, if any the agency has for your business, and your desired approach.

I once won a medical account because the previous agency was refusing to set up payment plans and instead demanding full payment. We came in with a program that out customers on automatic payments, which are simple for all involved, and we were wildly successful.

License and bond

Make sure that the agency has the appropriate business license. Some states also require a separate collection license and bond

Research Capabilities

Half of files submitted to a collection agency need at least some sort of research to find a new address, new phone or other information necessary for collection. In the collection agency, this research is called skip tracing, and it is very important. Ask the agency how they perform their skip tracing. It should always be included in the collection rate your agency charges, and never extra.


Although some collection agencies offer a low flat (non-refundable)rate fee for basic contact, real collection of bad debt is done with a contingency rate. Contingency collection rates are based on aging of the debts placed. With this sort of approach, your agency gets paid only when they get you paid. No collection means no fee.

The lowest rate is not always the best rate. Ask the agency for references,  and ask them to describe how they will work to collect for you. Be very careful, before you sign a contract, that you know what is included in the rate, and what is extra.

Legal Capabilities

Many collection agencies have attorneys on staff, or have a working relationship with attorneys to work on files that need to be referred for legal action. Make sure to understand how the process works, and what extra costs, if any are involved.

Also, ask the agency if they are experienced in post judgment recovery. It is one thing to get a judgment, another to get the money.






Collection Agency or Attorney: Which is Best for Your Business?

Posted by Marilyn Miller on February 12, 2019  /   Posted in Uncategorized

I am often asked to comment on which option – a collection agency or attorney is best for collecting bad debt. The simple truth is that one size does not fit all. Each option has its benefits and the best option has to be based on your specific collection needs:

Size and number of files – Attorneys generally litigate. If you have a large number of files of varying amounts, litigation will not always make sense. A collection agency is equipped to reach debtors by both mail and telephonic contact. A law firm may want to work only on the larger files, or will send only one demand to files under, say $1,000.  A collection agency certainly can handle larger files, depending on the nature of the file.

Location – If your customers are in various states, an attorney may be unable or unwilling to help you, or you may have to retain different lawyers for different locations. Many collection agencies are multi-state, and some are national in scope.

Rate basis and out-of-pocket costs –  Whether you choose a collection agency or attorney, always ask for a contingency rate versus flat or hourly. A contingent rate means that you will not pay anything up front, and receive a percentage of sums collected.  Also, ask for an estimate of out of pocket costs. What is included in your rate and what is extra?  If your attorney is going to litigate, you will likely have to front the costs and get them reimbursed when the money is collected. Court costs vary, but they can cost you hundreds of dollars, which brings up the next factor – actual collection of the funds.

Post Judgment Collection – If you hire an attorney and are awarded a judgment, the court does not collect the money for you. Getting a judgment is one thing – getting paid is another. In some states up to 80% of judgments go unpaid. I have been asked many times to collect judgments obtained by attorneys. Make sure collection agency or attorney has the experience and is willing to pursue post-judgment collection.

Research Capability – Over half of the delinquent customer files need some sort of research to locate debtors or their assets. You make sure the collection partner you choose has the experience and tools for quality research. Also, you should never pay an additional fee for research.

Credit Reporting – Reporting debts to credit bureaus is often cited as the key benefit of hiring a collection agency. I disagree. First of all, credit bureau reporting laws have been changed to limit the types of files that can be reported by requiring information you may or may not have on the customers, such as date of birth or social security number. Also, the credit agencies have limited the impact of some types of debt to the credit score, making credit reporting have much less impact. Lastly, reporting a debt may make you feel good, but it will not in many cases get you paid. The key benefit of using a collection agency should be their ability to focus on your files, and make a consistent and prolonged effort to get recover for you.

Focus and Experience – Make sure the collection agency or attorney has experience collecting for your type of business. Use a collection agency or attorneys who specialize in debt collection. The attorney who did a great job on your will may not be the best choice. Also, whoever you choose has to be versed in the various collection and credit reporting laws such as the FDCPA and FCRA.

The best option is to find a collection agency that has relationships with attorneys. If the collection agency cannot collect the debt, they can research the file to see if litigation makes sense. They can also assist the attorney with post judgment collection. Therefore if you are hiring a collection agency, make sure they attorney relationships and get the best of both worlds!

Debt Collection and Customer Retention: You Can Have Both

Posted by Marilyn Miller on February 10, 2019  /   Posted in Uncategorized

Debt collection and customer retention are not mutually exclusive. It is possible to manage delinquent customers if you have a consistent plan. Small business owners work really hard to gain new business. Every new relationship begins with the expectation of payment, so when payment is not received, it feels like betrayal. How do you juggle your need to be paid with the need to grow your business and retain customers? Is there a way to collect money owed to you and protect, even salvage your client relationship?

Sure there is. You must commit to a consistent plan:

  • Start every relationship off the right way with a good contract that outlines all payment terms and the consequences of non-payment. Customer contract do not come from lack of trust. Putting the details of your business relationship in writing, and having both parties agree is NOT a negative way to begin a business relationship. In fact, it is a great way to make sure all parties are on the same page from the start. Great relationships begin with great communication.
  • Know your customers and how they pay. Do not give the same terms to all credit customers. You may give your largest or most promising clients more credit than others. With other customers who may be slow payers, ask for a down payment before extending credit.
  • Every month, review your accounts receivables and follow up with them diligently. Polite reminder phone calls and well crafted collection letters can work wonders.
  • Perform “triage” on all customers over 90 days past due. Make two piles: customers you are willing to ride it out with a little longer and those that need to be sent immediately for outside collection. There is a big difference between a client who responds to your calls and asks for a little more time and a customer who totally ignores you or flat out refuses to pay. Decide which customers you wish to keep and wish you no longer wish to have as customers.
  • Make them an offer they cannot refuse! Find creative ways to offer new product if the old balance is paid in full. For example, if your customer owes you for three months, offer 3 additional months at a discounted cost if the original 3 months are paid in full. Consider a small discount of say, 10% for payment in full. A small discount will be less you will pay a collection agency, and might just do the job. However, make sure you communicate in writing that your offer is only available for a limited time, and will be withdrawn on a certain date.
  • For customers you wish to send for outside debt collection, decide which customers (if any) you would take back once their bill is satisfied. Let your collection agency know as they may be able to use the information to get the bill paid. We strongly recommend not providing new services to accounts that have been sent for outside collection until balances are paid in full.

In the end, it all comes down to communication with your customers and a consistent plan for tracking the money owed to you. Good customers will appreciate your discipline and fairness, and those who do not work with you may not be worth your time for the long term.

Medical Debt: Patient Payment Issues and How to Avoid Them

Posted by Marilyn Miller on February 08, 2019  /   Posted in Uncategorized

Medical debt in the United States is growing. Although the Affordable Care Act has made insurance coverage available to many, out of pocket costs are rising, which means more patients are struggling to pay medical bills.

Now more than ever, communication with patients is key. Good communication can help avoid patient payment issues down the road.

Here are some common comments we hear from patients that are referred to us for collection, and things you can do to help avoid issues.

“Why didn’t my insurance pay?”

Often it is not that insurance did not pay, but that they did not pay 100%. However, health insurance is confusing. A good part of medical debt collection involves explaining how an insurance processed their claim. As much as possible, verify coverage before you see a patient and review expected insurance payment and out of pocket costs with them. Be mindful to explain any limitations or waiting periods. Clearly list any out of pocket costs. Ask client to sign the form, and keep in their chart.

If you are out of network with a provider, make sure the patient signs in advance that they understand this fact, and sign in advance that they are responsible for payment if insurance does not pay. The same holds true for self pay patients.

“I did not realize I had a deductible”

I list deductibles in a separate category because they have really changed medical debt collection since more and more people have larger deductibles.  As part of your new patient packet, include a form for patients with large deductibles, and ask them to acknowledge, in writing that they understand. 

“My ex is responsible for our payment of our kids bill”

Institute a policy immediately that states that the person bringing child to your office will be responsible for payment, no matter who has the insurance. Have parent sign before you see the child. DO NOT get involved in their squabbles. You are not a party to the divorce, so do not let parents drag you into their drama. 

“I had a payment plan with the doctor”

People often remember the part of the deal that works for them. Some remember that they have a payment plan, or that you offered a discount, but forget that they actually have to pay, or that the discount was based on prompt payment. 

Document all payment plans. If you make an offer to provide a discount, do it in writing and also advise that the discount is a limited time offer, and will be pulled if payment not made by the due date.

It may seem like this advice will lead to more paperwork, and it might, but if you have the forms ready for new patients and make your standard operating procedure, it should not put a burden on your staff, and will benefit you in the long run. 

We also recommend having patients re-sign new financial agreements every year. My lawyer once lost a case in court because the patient financial agreement was five years old, even though the patient had been receiving services all along.





Payment Plans: I’ll Gladly Pay You Tuesday

Posted by Marilyn Miller on February 04, 2019  /   Posted in Uncategorized

If you grew up, like me, watching the Saturday mornings Popeye cartoons, you may have wondered if Wimpy ever managed to pay for that burger.

Of course, the Wimpy of today might just whip out his debit or credit card to pay for it, just as many people will pay for your services this year. But, if you are in the business of giving your customers credit, i.e, letting them pay “Tuesday” for services you provide today, then there is one word you must remember when setting up a payment plan, and that word is document.

Document. Document! DOCUMENT!

Memories fail us. It is important to detail of the plan in writing and make sure both parties sign to indicate their agreement:

1. Amount of money to be paid, amount of installments, number of installments (Example: “…will pay the sum of one thousand dollars ($ 1,000 USD), payable in 10 equal installments of 100.00 each)

2. When, where, and how each payment is to be made – exact details. (Example: Payments should be made payable to {Company Name} must be mailed to {Company Name, Full Address} so that payments are received by the 15th of every month.) Also, don’t forget that this agreement should list whether or not interest will accrue on unpaid balance.

3. Consequences for default on agreement – Will default void the agreement? Will you charge a late payment fee? Will the file be sent to a debt collector? Make sure to specifically detail what happens if the terms are not met exactly as agreed. 

There are also several ways you can use payment plans to enhance your cash flow and also make it easier for people to pay you. 

1. Obtain a larger down payment up front with small back end payments.

2. Consider an online payment portal.

3. Set up automatic credit/debit payments, keeping a card on file (VERY important to get a signed consent to use the card in the case of any dispute)

4. Payment coupons – Very old school, but some people like them. Some people like a monthly statement and envelope.

5. Offer an incentive for early payment of balance.

Remember that people are busy. Make it easy for them to pay. Convenience is key!

Eight Signs it is Time to Hire a Collection Agency

Posted by Marilyn Miller on January 28, 2019  /   Posted in Uncategorized

You have a growing small business, are “doing everything right”. You use customer contracts and have a good plan to recover bad debt in-house. When do you need to hire a collection agency?

Here are 8 signs it is time to get some outside help:
  1. You have a growing number of receivables over 90 days past due.
  2. You are spending too much time chasing non-paying customers and you do not have enough time for sales and customer service.
  3. You are having trouble paying your creditors because you are owed so much money.
  4. You do not have the cash flow to hire new employees or buy new equipment.
  5. Customers you have been billing move and you have no way to find a new address or contact information for them.
  6. You and your staff do not wish to be involved with customer disputes over payment.
  7. You have been going to small claims court and getting judgments, but are still not getting paid.
  8. Your accountant tells you that you cannot get a tax benefit from writing off your bad debt.

When small business owners to not get paid, it hits the community and people in the community immediately. Small business owners usually pay themselves last, and if they do not have the cash flow, they work for nothing. Heck – even President Trump has been accused of non-payment to small businesses.

Hiring a collection agency can save you time and put cash back into your business.

Debt collection agencies have resources to research and find people and their assets. They are expert negotiators who know how to handle disputes. They can set up effective payment plans and make sure people pay when they say they will. If you have obtained court judgments that you cannot collect, a collection agency knows how to attach assets, and execute court judgments using liens.

Hiring a debt collection agency may be the best business decision you make this year!

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