Partner with us – a trusted, collection agency that combines national reach, strict compliance, and deep industry experience to recover your bank’s past-due loans efficiently and professionally. Serving several banks and credit unions.
Banks issue various loans to businesses and individuals in the form of mortgage loans, credit card balances, loans to small businesses, car loans, student loans, and other financial products. Banks also charge overdraft fees on accounts where the withdrawal exceeds the available balance. Customers are also liable to pay late fees if there is a delay in making payment on time.
A collection agency with experience in recovering money for financial institutions understands the importance of recovering maximum money for banks. Banks do not want to lose customers or risk their own reputation. Therefore, recovery needs to be done carefully, empathetically, and diplomatically.
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Banks sometimes send their customers’ accounts to collection agencies for several reasons:
- Effective Debt Recovery: Collection agencies specialize in recovering overdue loans and credit card payments, using proven techniques to collect debts effectively. On average, collection agencies recover approximately 20-30% more debt compared to internal bank teams.
- Core Business Focus: Outsourcing collections allows banks to concentrate resources on lending, customer service, and investment management.
- Cost Savings: Managing collections internally can be expensive, with internal collection costs ranging from 15% to 25% of the recovered debt. Collection agencies typically operate on a contingency basis, charging only when debts are recovered, typically between 15% and 35% of the collected amount.
- Legal Compliance: Agencies are adept at navigating complex debt collection laws, minimizing the risk of legal disputes or regulatory penalties—which can range from $500 to $10,000 per violation.
- Skilled Negotiation: Professional collectors possess expertise in negotiation and persuasion, often achieving better recovery rates than banks’ in-house teams.
- Behavioral Impact: The involvement of an external agency signals seriousness to debtors, prompting quicker resolution.
- Credit Reporting: Agencies report unpaid debts to credit bureaus, incentivizing debtors to pay promptly to avoid damaging their credit scores by up to 100 points or more.
- International Reach: Specialized agencies can effectively handle cross-border debt recovery, overcoming geographical and jurisdictional challenges, which often involve recovery complexities and additional expenses.
Overdrawn checking accounts are generally frozen (or closed) after 45 days by banks. A series of post-charge-off demands can be sent to your client.
Most banks follow up on past-due accounts using in-house employees for the first few months. Some accounts get settled this way; however, hundreds of past-due accounts remain delinquent even after repeated in-house efforts. They must be assigned to a professional collection agency to recover money from these accounts. A collection agency will help you streamline your debt collection process and reduce costs.
Smaller value transactions, like the fees for an overdrawn checking account and credit card debt, are transferred to collection agencies after 60 to 90 days of non-payment. Big-ticket loans like mortgages and student loans are transferred after six months or more.