Banks are the backbone of the global economy. They issue a variety of loans to businesses and individuals in the form of a mortgage loan, credit card balances, loans to small businesses, car loans, student loans and many other financial products. They also charge overdraft fees on accounts where the withdrawal exceeds the available balance. Customers are also liable to pay late fees in case there is a delay in making payment on time.
Most banks follow up on past-due accounts using in-house employees for the first few months. Many accounts get settled in this way; however there are still hundreds of past-due accounts that remain delinquent even after repeated in-house efforts. To recover money on these accounts, they must be assigned to a professional collection agency. A collection agency will help you streamline your debt collection process and reduce your overall costs.
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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 the mortgage and student loans are transferred after six months or more.
A collection agency that has experience in recovering money for financial institutions understands the importance to recover maximum money for banks while keeping a diplomatic yet a firm approach when working on these debts. Banks do not want to lose customers or risk their reputation. Therefore recovery needs to be done in a careful, empathetic and diplomatic manner.
A collection agency for banks needs to act as an extension of their accounting department. They must operate within legal guidelines specified by the government; these include FDCPA (Fair Debt Collection Practices Act), FCRA (Fair Credit Reporting Act), TCPA (Telephone Consumer Protection Act) and many State and local laws that exist. These debt collection laws exist to protect debtors from potential harassment by original creditors and collection agencies.
The involvement of a collection agency for recovering money from all kinds of delinquent loans is extremely effective. The staff of a collection agency is trained to recover money from even hard-to-handle debtors; after all, that is what they do all day long.
When communicating with the debtors of financial institutions, a debt collector needs to convey the repercussions of not paying the debt clearly. This includes the further deterioration of his/her credit history. Bad credit history will limit his ability to obtain loans in the future, and even if the debtor qualifies for a loan, he will have to pay a higher interest rate on it. Moreover, few employers run credit history checks on their prospective employees at the time of hiring.
A bank collection agency may take past-due cases to court. They may seek a judgment that will permit wage garnishment or claim money sitting in the debtor’s bank account. Moreover, all the costs associated with this legal action may be added to the principal amount.
A collection agency should clearly communicate to the debtor that if he does not make the payment now, the collection demands will not magically go away, but will likely continue for a very long time.
Debtors should be offered to make payments in installments if required. In a few cases, the debt is settled for a slightly lower amount ( provided a “Settle in Full” agreement has been signed with the original creditor).
For financial institutions, it is important to select a collection agency that is medium or large-sized, and provides these facilities:
1. A secure web-portal to submit accounts, report payments, and stop collection activity when needed.
2. Has a customer support team that is proactive and easy to reach.
3. Payment Card Industry (PCI DSS) compliant systems. SOC or SOC2 security certification.
4. Safe storage of sensitive data.
5. Datacenter should be located within the USA. All debt collectors should be located in the USA as well.
6. Limited access to sensitive data; only authorized employees in the collection agency should have access to it.
7. IT Servers are regularly patched for security and stability.
8. Encryption is applied wherever required ( ex: SSN, DOB and passwords). SSL/HTTPS protocol to all portals.
9. An experienced collection staff and a network of local attorneys all across the USA.
10. Their staff must be trained periodically on how to handle the client’s data in a secure way. Debt collectors must follow all the required debt collection laws.
| Services provided by a Collection Agency for Banks |
| Collection Letters Service |
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| Collection Calls Service |
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Are you looking for a good collection agency that has significant experience in the financial industry? Contact us for more information. Equipped with a dedicated team of financial debt collectors. For foreclosure debt, a combination of collection calls and a collection attorney notice is very effective.