Have you ever fallen for a debt collection agency claiming to be the cheapest and best, and later found out that
- It was not exactly true.
- They have simply cut a few important steps of the standard debt collection procedure to make their pricing cheaper than others. They basically sold you an inferior product.
- Offered no customer support after sales, or your calls were forwarded to a call center located in a foreign country who did not speak good enough English, leaving you very concerned about the fact that your and your debtor’s data is being shared and handled by non-American staff, furthermore how securely is it being handled there.
- Even the collection services that were promised, turned out to be sub-standard and resulted in lower than average recovery rates.
- Did not do a Change of address, Bankruptcy check and most important Litigious customer check to protect you from potential counter lawsuits.
- Made you buy too many accounts, products or services, or they came with a 1 or 2 year expiration date?
- Made you buy cheap service earlier, just to realize that there were hidden fees attached.
Oh, lets not stop there ..
Even for the Collection Calls service we have heard these tag lines
* No Recovery – No Fees ( Read it: We are pushing you for Contingency only collections since our collection agency earns most from it. Did they even offer you low cost flat fee Letters Service.)
* Whatever we collect – You keep half and we keep half ( Read it: Contingency fees is 50%. Too high. Anything over 40% is high.)
You get what you pay for !
No collection agency will give you a super cheap package without removing some crucial steps, cutting corners, outsourcing to a foreign country, providing an inferior customer support and leaving you more prone to lawsuits.
What to look for?
Go for the collection agency which offers superior services for optimum cost, so that you get maximum returns for your buck. The fact is, the difference in cost or commissions charged between an inferior collection agency and a good full service collection agency is not more than 10%, but results are dramatically different.
An ideal collection agency should roughly charge this:
- Low cost fixed fees Collection Letters service ( usually between $10 to $20 per account), for debts less than 6 months. They should encourage you to use it and even offer you a recovery rate guarantee in written for this step.
- Contingency rates for Collection calls and Legal Suit should be no more than 40%.
- Should offer discount if your your volume is quite high or if account balances are over $10,000.
Collection Agency should definitely offer these services too:
- Offer all 3 scrubs – Change of address, Bankruptcy check and Litigious customer check.
- Should offer full service of 5 collection letters, nothing less.
- Should not put an expiration date on accounts purchased under the collection letters service.
- You should be able to buy a accounts in bulk to avail cheaper pricing.
- Should send collection letters in “Colored Print”, and not in plain Black and White. A colored print is known to grab immediate debtor’s attention than a boring B/W print.
- Should have all operations located in USA and/or handled by USA citizens or residents. This includes Customer support, Debt Collection agents, Software development and Call Centers.
- Should offer credit reporting to agencies like Equifax, Transunion and Experian.
- Should offer collection activities in both English and Spanish.
- Should offer an Online Client Portal where you can submit accounts, stop service on an account, report payments and monitor performance.
- Should have a PCI or a SOC 1 security certificate.
- Should be insured, certified and bonded. Should be licenced to collect in all 50 states of USA.
- Should follow all FDCPA collection laws and regularly screen or train their debt collection staff for it.
- Do background checks of their debt collectors before hiring.
Contact us if you are looking for a full service, well priced collection agency with experience in your industry.