If you decide to hire a collection agency to help you recover money owed to you, have you made a good decision? It all depends on the reasons you are choosing a collection agency.
Here are some good reasons to hire a collection agency:
- You and your employees are spending too much time chasing delinquent customers.
- You are having trouble paying your creditors because customers are not paying you.
- A growing number of customers are over 90 days delinquent, and you are not sure why.
- Customers have moved or changed their phone numbers and you can no longer contact them.
Here are some bad reasons to hire a collection agency:
- You just want to get back at someone and think a collection agency will harass and abuse people.
- You do not really want to collect the money. You just want to “ruin their credit” and believe a collection agency can do that for you.
- You have another collection agency or attorney working for you on the same files at the same time, basically pitting the two against one another.
- You know that you really need to hire an attorney, but you do not want to pay a retainer and you believe since collection agencies work on contingency that they are “free”.
It is the final reason, the belief that a collection agency is somehow free that is the most ridiculous. You are in business for many reasons, among them the desire to make a living. A collection agency is no different. We want to help our customers, and we are passionate about their right to be paid. However, we too have to make a living. we do not charge any money up front, but rather take a percentage of money we recover.
When we take on a new customer, we do so with the belief that we can collect money for them, and thereby earn a commission. It is often a leap of faith since we do not know much about the debtor or the circumstances that produced the debt. We are willing to take that leap based on our experience. However, if we are not provided with complete and accurate information, it becomes more difficult to get the best results. If we are not told the “whole story” by you, we will likely learn it from the debtor once we make contact. At that point, we will question whether or not you are serious about working with us. If we feel you are wasting our time, we will lose the will to work on your files. In that case, everyone loses, except the customer who got your product or service for free.
Do not make the mistake of believing that because a collection agency does not charge a fee up front, that they are free. A collection agency makes an investment of their time and effort to recover bad debt for you. If you respect that investment, the rewards to both you and your collection agency will make it worthwhile.