Credit Collection Agency

Nothing reduces cash flow like unpaid invoices. Especially in a small business, hunting down the guilty parties is both a financial and emotional drain.

To recover owed money, many businesses turn to credit collection agency services. These firms specialize in collecting payment from overdue accounts.

How Can A Credit Collection Agency Help?

Credit collections agencies can attempt to collect on bad debts in two ways:


By Mail Only

Smaller debts may not justify the cost of phone calls, limiting the credit collection agency to simply sending threatening collection letters. 

By Mail & Phone

For larger debts, credit collections agency will typically send collection letters, and then make phone calls to the delinquent account if the letters do not motivate the debtor to pay. 

Legal Action

If the collection letters and the collection phone calls have not recovered the money, many credit collections agencies will file suit in a final attempt to recover the bad debt. 

How To Choose A Credit Collections Agency Service

Choosing a credit collections agency can sometimes be daunting because it's hard to predict a credit collection agency's success with collecting delinquent accounts ahead of time. Following are a few areas to investigate when choosing a credit collections agency:

Techniques Of Collection

You should examine the collection letters that will be used by the credit collections agency and decide whether they will be effective with your customers. You should also ask about the training that telephone collectors receive to ensure they understand the Fair Debt Collection Practices Act. 

The Fair Debt Collection Practices Act requires that debt collectors treat debtors fairly by prohibiting certain methods of debt collection. 

How The Credit Collections Agency Works With You

Be sure to discover: 

How information is transferred to the credit collection agency. 
When collected money will be forwarded to you. 
What reporting is provided detailing the collection activity. 
How you can stop collections if you receive payment directly.

How They Handle Skiptracing
This is important when collecting from individuals. Skiptracing refers to how the credit collections agency locates debtors who have disappeared and can't be reached or contacted. Credit collections agencies should have access to online search capabilities and telephone databases to help locate these debtors. 

Reputation And Years In Business
How long has the firm been in business? Make sure to check references, particularly from clients that are in a similar business. Also find out whether the firm complies with state licensing or bonding laws.

Recommended Credit Collection Agency Sites:

Credit Collections Agency
Find an ethical and professional collections agency.