It’s a field that can be clouded in controversy, which is why it is absolutely crucial that you solidify your debt collection efforts from an early stage.
However, if you have never taken the plunge before, there can be a lot of grey areas. Through today’s article, we will take a look at some key tips to take into consideration if you are about to hire debt collectors for the first time.
Weigh up the reputational risks
To say that there is a fine line when it comes to debt collection would be a gross understatement.
One can’t forget the fact that this is about your bottom line. You have hired debt collectors to recover money owed to you and it’s always going to be in the back of your mind that you want to get as much of that money back as possible. As such, if you go with an expensive service, this eats into your returns.
However, before you start to focus solely on profit, consider the reputational repercussions. Some debt collection agencies have an awful reputation and if you are associated with them yours will suffer as well.
Instead, find a happy medium. Sure, you need reasonable fees, but make sure you are pledging your faith in a company who does everything above board.
Assess the process of the company in question
In short, all debt collection agencies offer a little differently.
There is no ‘right’ answer, but there are certainly some signals that suggest that you have chosen one of the better providers.
For example, for the purposes of today let’s home in on tracing. The better debt collectors will be excellent at this. If a person cannot be found at the initial address, they will trace them to a new address. Others, meanwhile, won’t do this, and will instead just take advantage of the low-hanging fruit that allows them to reach people at the first address they are given.
Sure, these companies might be excellent at finding these debtors, but unfortunately not all cases are like this and a degree of tracing is crucial if your debt collection agency is going to be a successful fit for your business.
The legal factors
In some ways, this breaches some of the topics we covered in the first section. After all, if an agency isn’t acting within the law, it will hamper your company’s own reputation.
There are other issues at stake here, as well though. If you are found to have hired an agency who doesn’t operate within the correct legal frameworks, claims can be made against you. You can be held liable for hiring the agency in the first place, which is why you need to find the proof of insurance, and make sure that it will cover you and the agency if anything goes wrong.
Suffice to say, if they don’t have such paperwork, stay away.