Outsourcing Debt Collection to Third Party Collection Agencies Experience

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Outsourcing Debt Collection to
Third Party Collection Agencies Experience

by Jason Helsley
(USA)

I have been at my current job for nine years working as the accounts receivable manager of a home care company. We have been through several third party collection agencies. There are numerous stipulations that you must wade through, and if the agency(ies) that you have been outsourcing your debt collection to is not aggressively pursuing your accounts, the results can quickly go from nil to naught.

The best practice for my company has been communication. From the ‘Welcome Letter’ all of our clients get on day one to the ‘Client Satisfaction Survey’ after they end services.

By keeping lines of constant communication, we have minimized outsourcing debt collection to third party agencies. Third party collection agencies are a necessary evil, so please do your research and get a good one.

A few tips to look for:

1) Make sure the agency has an attorney. You may pay a bit higher percentage, but having letters sent on an attorney’s letterhead alone can help.

2) Always familiarize yourself with the laws of the state your debtor lives. Some states only allow attorneys from that state to bring charges against its residents.

3) Accept credit cards. This has increased our in-house efforts dramatically.

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Outsourcing Debt Collection to
Third Party Collection Agencies Experience

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Jul 02, 2009
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Collection Agencies Experiences...
by: David

Hello Jason!

Thanks for sharing your collection agencies experiences. Your ideas are correct; if deciding to outsource to third party collection agencies, its definitely to your advantage to seek out agencies that operate in several states, even nationally, ideally. Because the laws can differ greatly between the states, in addition to the fact that we live in a very mobile society, look for collection agencies that are licensed nationally, since they will be familiar with the various states' laws.

Having attornies on hand is also a great idea, since some cases may require legal action. Getting communications from an attorney can have an added impact for sure.

You're also correct about credit cards. Not only do they minimize slow pay issues, but any business serious about increasing their cash flow would accept credit cards as a payment option. Fewer people are writing checks these days, or even carry much cash. Credit cards can also increase "impulse buying", as people tend to spend more money when using credit cards, than if they had to pay cash for all their purchases.

Be careful though: there are a multitude of merchant account processors out there. And many will entice you with low introductory "teaser" rates, only to trap you in long term contracts will all sorts of added fees, etc. Learn more about what to look for in a merchant account processor.

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Outsourcing Debt Collection to Third Party Collection Agencies Experience

Comments for Outsourcing Debt Collection to Third Party Collection Agencies Experience

Outsourcing Debt Collection to
Third Party Collection Agencies Experience

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Outsourcing Debt Collection to
Third Party Collection Agencies Experience