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.

 

 

 

 

 

 

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