You have done your due diligence and hired a collection agency that you think will help your small business. Now how do you make sure you get the best results?
Communication is key, so stay in touch with your debt collector. The collection process is fluid, and things will change. Even the best debt collection agency will be handicapped if you do not share certain important information.
1) Report all payments made to you directly – We recommend that once you send an account to collections that you stop any communication with the customer and let your debt collectors handle everything. However, if someone walks into your office with a payment, or sends a check, accept the payment and let your collection agency know immediately. Many people react to a collection letter or phone call by simply mailing their payment in to their creditor. Don’t assume that the debtor will let the collection agency know they paid. Some people do not want any contact with the collection agency, and just want to get the collection process over with. If you do not tell your agency about the payment, they will continue making contact, which not only makes you and your agency look bad but takes the focus away from other files that need more attention.
2) Send your debt collection agency any correspondence from the debtor customer, especially a dispute. Sometimes, people will be silent until their account is in collections, and then will launch a dispute. You should give this information to your debt collection agency immediately Some disputes are reasonable, others are just a smokescreen. Let your collection agency handle these disputes, it is what you hired them to do.
3) Immediately report any bankruptcy notices or other legal information. Once a debtor has filed bankruptcy, collection agencies must cease all communication with the debtor. Oftentimes the original creditor and the collection agency are not notified of the bankruptcy, but do not assume that your collection agency knows about it. Similarly, if your customer retains legal representation, the law requires that all communication go through the attorney and nothing direct to the debtor. Not communicating this important information can actually result in litigation that will sidetrack, or even derail the collection process.
4) Let your agency know about any changes of contact information. Your agency should be researching debtors to find the latest contact information, but public information is not perfect, so if you get a new piece of information, share it.
5) Share any piece of information you read or hear about the debtor, whether or not you think it is important. New job? Getting divorced? Selling home? Bought a new truck for the business? These seemingly small details are little gold nuggets of information to your debt collector.