Search Results for: the bureaus

You had submitted accounts to a collection agency, but they have ceased their operations now.

This is a fairly serious situation. 

What happens to the accounts they were working on, and what about those debtors in the middle of a payment plan?

Are there any legal aspects involved?

What about the charges that were credit reported? If there is a need to undo the credit reporting for a debtor (say due to some error), how will that be handled? 

• Try to retrieve any files, account data, or documentation they have regarding your accounts. Keep records of all communications with the collection agency. If your debtors have made payments to the agency or have arranged a payment plan.
• Explore any potential claims you may have against the agency.
• Are they notifying your debtors about the shutdown and any instructions on how their debt will be handled in the future?
• If the agency was responsible for reporting to credit bureaus, ensure this information is accurately reflected or transferred as needed. Make sure that any payments your debtors have made are reported.
• Double-check that the agency has shut down and that this isn’t a mistake or a scam.

There is a possibility that your old collection agency is not cooperating or is simply unreachable. Their phones don’t work and they have abandoned the office.

Next, Hire a new Collection Agency. Your priority this time is to look out for a mid-to-large-sized collection agency, regardless of their location. Smaller agencies always carry the risk of shutting down.

Your new collection agency should be able to guide you through the transition process. Share all updates that have been received from your old collection agency.

There is a systematic procedure to hand over accounts from one collection agency to another that is legally compliant and convenient. Not all collection agencies are experts in handling this transition.

Need a new collection agency: Contact us today Please mention that your existing agency has closed, and we’ll make the transition easy.

Many collection agencies have shut down recently due to the following reasons.

• Covid-19 Pandemic: Collection agencies were barred from collecting money in many states during the pandemic, impacting revenue from existing accounts. Moreover, the new business had stopped coming since people were not going to their offices and debt recovery was the last thought in their minds.
• CFPB rules: On November 30, 2021, the CFPB’s new Debt Collection Rules became effective, becoming a major roadblock for the entire Collections industry. Many collection agencies found it better to wind up the business than become compliant with these new CFPB rules.
• Credit Bureau Reporting changes: Starting July 2022, the top 3 credit bureau agencies made it harder to report medical debts for credit reporting. Medical debts form nearly 50% of consumer debt collections.
  
• Gramm-Leach-Bliley Act: As per FTC, starting June 9, 2023 all collection agencies will be treated as financial institutions. This means all collection agencies must secure consumer data nearly the same way as banks. It’s a huge yearly cost for collection agencies, especially the small ones.

What to Look in your new collection agency

• Most collection agencies that shut down were small collection agencies. Hiring medium-sized collection agencies with the license to collect consumer and commercial debt across the USA is always advisable.  
• They should have a staff of more than 25 people and in business for more than 10 years.
• Immediately hire a collection agency (without delay) because there may have been quite a few of your debtors who were about to pay or were paying their debt in installments.
• Hire a collection agency that offers both fixed fee and contingency fee collections. Accounts less than 90 days past due should ideally be submitted for fixed fee collections.
• You should also be able to download a collection performance report for all your accounts online. 
• They should have the license to collect money in all 50 states, which takes care of issues in case your debtor crosses state lines.

 

 

We all agree that healthcare costs in the USA are incredibly high.

Most doctors (and dentists) who do private practice struggle to cope with never-ending government regulations and mandates, a constant fear of frivolous lawsuits, dealing with insurance companies, and loss due to unpaid patient bills. The medical profession is among the most stressful careers out there.

Back to our core topic of medical debts and credit reporting of medical bills, here are our thoughts on this matter.

Regardless of the balance, reporting all unpaid bills to credit bureaus as the final step does two main things.

1. Inform future creditors about bills on which a person has defaulted so they can assess their own risk to lend money to that person.
2. It gives a chance to the borrowers to pay off their bills so that the concerned credit report entry can be marked as “Paid in full.” Paying off reported bills helps borrowers to improve their credit scores instead of leaving them unpaid.

But all this is changing, “only” for medical debts.

Credit bureaus have implemented these new rules:

a) Stop reporting medical debts lower than $500
b) Remove medical line items that have been fully paid
c) Collection agencies must wait one year before medical debts can be reported.

In the last few years, there has been a pushback on how medical bills are reported. These include government rules, credit scoring models, and even credit bureaus have made their own rules.

All these create roadblocks for medical credit reporting, encouraging patients to avoid paying their bills.

Debt is a debt … Shouldn’t all unpaid defaults ( medical or otherwise) be reported to credit reports in the same way?

Then let the lenders decide which one they want to consider or ignore.

Forcefully suppressing unpaid medical debts from credit bureau reporting will undoubtedly result in many unintended consequences.

•  Fewer patients would be willing to pay their medical bills. Even those who can pay may decide not to pay in the future.
•  The cost of unpaid bills will be passed to patients who can pay.
• Won’t hospitals be encouraged to push patients for procedures with a higher chance of getting paid?
•  This also means that the cost of medical treatments will increase gradually.
•  Some medical practices may try to intentionally inflate the cost of specific treatments so that accounts receivable from patients is over $500 so that they can be reported to the credit bureaus.
• On the other side, even patients may very well pay a portion of their medical bills, so the outstanding amount is less than $500. Now default on the remaining amount since there is no risk of credit reporting for amounts lower than $500.
• How is medical debt different from any other bill? Why does defaulting on one type of bill differ less from other kinds of bills? Isn’t this increasing the risk for future creditors who will lend money to the patient without knowing that the patient had past unpaid (medical) bills?

For example: What if a patient who owes $10,000 in medical bills wants to take a $500,000 home loan? Now he purposefully pays his old $10,000 medical bill to remove it from his credit report. Then he can qualify for a $500,000 loan. Wouldn’t this increase the risk of the bank/credit union with whom he takes that mortgage?

Suppressing how medical reports are reported to the credit bureaus will surely increase the cost of healthcare, more defaults, more legal mess, and higher risk for future creditors.

Have you mistakenly overpaid your employee or a contractor who refuses to return that money?

• Did you sponsor higher education for your employee with a commitment to work with you for a few years, but he resigned right after completing the degree?
• Did they sign a contract stating they would pay back the training fees if they didn’t work for a specific duration?
• Other circumstances where an employee can owe money to his employer include – overpaid salary, excessive travel expenses, misuse of company credit card, unreturned company equipment like a laptop or excessive reimbursement claimed.

Need a collection agency? Contact us

A collection agency can work with your employee professionally and legally to ensure that you get your money back. Their recovery efforts will include sending demand notices and calls from a professional debt collector. If the amount is substantial or litigious, they will forward it to an experienced attorney.

Often the employee becomes unreachable or unresponsive to the employer’s contacts. They often change their address. A standard practice among all good collection agencies is to use the Skip Tracing service to find out the latest whereabouts of the debtor or the offender. A collection agency is not a replacement for police; they only act to recover the debt legally. They can report the debt to credit bureaus like Transunion and Equifax if the creditor/employer instructs them. It is crucial to maintain proper documentation to avoid getting sued by your ex-employee in cases like these. An employee debt collection agency will follow all federal and state debt collection laws to recover all unfair reimbursements and money owed.

Recommendations:

Document the Overpayment: Create a clear record of the overpayment, including details like the amount, the reason for the overpayment, and any relevant policies that were not adhered to.

Listen to the Employee’s Perspective: Allow the employee to share their side of the story. There might be information or circumstances you are not aware of, and it’s important to consider all sides before taking action.

Final Internal Communication: Before involving a collection agency, it is often best practice to send a final communication to the employee outlining the outstanding overpayment and your intent to involve a collection agency if the matter is not resolved.

Provide Documentation to the Collection Agency: Supply the collection agency with all relevant documentation regarding the overpayment. This should include any communication you’ve had with the employee regarding the issue.

Traffic and parking violation tickets are a good income source for local enforcement agencies. Unpaid tickets can cause a huge hole in the finances of cities and counties.

If initial efforts of police and regional transport authorities to collect the fine are unsuccessful, engaging a collection agency specializing in government debt might be necessary. These agencies have the experience and tools to collect unpaid tickets efficiently.

Need a Collection Agency for Unpaid Tickets? Contact Us for a free consultation – Serving Nationwide

Courts and law enforcement agencies charge the original fine plus late penalties once an account is forwarded to collections. Some states allow them to charge an additional 30%-40% Collection Fee on top of the delinquent amount. The unpaid amount can be reported to credit bureaus if requested. Debtors can make payments online, over the phone, or using a credit card.

Some jurisdictions may allow the suspension of the violator’s driver’s license or vehicle registration if they have unpaid traffic tickets or parking violations.

Traffic police officers do not have adequate resources and time to chase people who have not paid citations, parking and traffic tickets issued by law enforcement officers. Collection agencies have advanced skip-tracing tools to find the latest contact information of debtors and employ diplomatic tactics to recover money. Forwarding these violations after 60 days to a professional debt collector for a maximum recovery rate is recommended.

Traffic ticket amounts are usually under $100, and not every collection agency will effectively dedicate the resources required to collect significant money from these accounts. Only those collection agencies with an efficient recovery process and those with extensive experience recovering for law enforcement agencies. A low-fee collection agency will ensure maximum money is recovered from unpaid traffic and parking tickets.

---

Segment Your Delinquent Accounts

Collection capacity isn’t unlimited, particularly when delinquency rates are rising. To use your limited capacity most efficiently, it’s helpful to segment your accounts based on delinquency length, the likelihood of collection success, potential recovery amounts, and other factors.

If you have the data available, it’s also useful to segment your delinquent customers based on the channels they’re most likely to respond through.

Segmentation models allow organizations to predict which accounts will require the least effort to recover the most significant portion of funds owed. This amplifies your recovery efforts and prevents your collections staff from spending an inordinate amount of time trying to collect what may be unrecoverable debt.

Expand Your Contact Channels

Modern consumers are reachable in a variety of ways. Phone calls have been the mainstay for collections, but in many cases, consumers have learned to avoid numbers they don’t recognize.

To increase your chances of success, assume an omnichannel approach that works to reach customers at every touchpoint available.

Options include, but aren’t limited to email, text messages, chat applications, and social media platforms. Particularly with younger debtors, digital communication methods tend to be more productive.

Targeting your delinquent accounts across a variety of channels makes it more difficult for them to ignore you. On the flipside, allowing them the freedom to respond to you on a channel they prefer will help you make contact.

 

Recovering Credit Card Debt Nationwide Need a Collection Agency? Contact Us Higher Recovery Rates: Top-Notch Customer Service

Be Compassionate, Not Combative

Approaching delinquent customers in a threatening manner tends to compound their problems. Not only do they owe money, now they have to duck angry phone calls. Hostility often increases a debtor’s tendency to bury their head in the sand and pretend the problem doesn’t exist.

Instead, approach customers with the assumption that they’re good people suffering from adverse circumstances. Instead of threatening them, work to understand what’s going on for them. When you come to debt collection compassionately, you become an ally, not an enemy.

Make sure they know that you’re willing to work with them and that you appreciate their circumstances. Customers that want to pay but can’t, will appreciate the lifeline you’re extending them, making return contact more likely.

Employ Skiptracing

Skiptracing involves compiling information from multiple sources, including credit bureaus, public records, internal research, and other sources, to build a cohesive picture of your delinquent accounts.

When a customer has moved on from known addresses and is no longer reachable, cross-referencing multiple data sources makes it possible to trace where they are and provides possible contact channels.

Be Persistent

Collections can be a thankless task. Delinquent customers can make it extremely difficult to contact them. However, in nearly every case, there are moments, due to entirely unpredictable factors when they’re open to having a conversation.

These moments of clarity can’t be foreseen, so the best way to time your phone call or text message with one is to attempt contact frequently and persistently. This process alone can generate a breakthrough by wearing your customer down.

You won’t be rewarded if you approach collections with sparse and inconsistent contact attempts. Your customer needs to know you’re trying to reach them, and you can’t let them forget.

Be Willing to Settle

Sometimes getting something is better than nothing. If you’ve exhausted your other options and your customer indicates they might be able to afford payment terms with a lowered principal, then a settlement might be in order.

Consider lowering the total debt, dropping the interest rate, or both, bringing the customer’s monthly payment into a manageable range. In many cases, customers stop paying not because they don’t want to, but because they can’t. Helping them get their financial situation under control may allow them to resume regular payments.

In the end, some debts aren’t recoverable, but with the consistent application of principles like those detailed above, a higher than average percentage can be collected.

Use a Collection Agency

Hire a credit card collection agency to effectively recover money from your delinquent accounts.

Collection Demands Service

The upfront cost for 5 Collection Letters is about $12 per account. Debtors pay directly to you, no other fees. Low-cost option. Good for accounts less than 120 days past due.

Collection Calls Service

Contingency fee only. No upfront or other fees. Agency gets paid a portion of the money they recover.  No recovery-No fees. Best for accounts over 120 days. A debt collector calls your debtor many times. If everything fails, a possible Legal Suit is recommended by the attorney.