Signs you need a Collection Agency

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Aug20

Signs you need a Collection Agency

August 20, 2006

Know More: Bad Checks, Debt Collection Letters, Fair Debt Collection Practices Act, I have past due customers, what do I do?, Making Collection Calls, Using Collection Agenices, What makes a Good Collector?

If any of the following things are happening within your business, you may need to work with an outside collection service or agency.

Look for these signs:

A new customer does not respond to a first letter. for some unknown reason, the consumer or debtor will not or cannot pay. Potential losses could be kept to a minimum by prompt referral to a collection service.
Payment terms fail. In some cases irresponsible consumers pay when and if they want to. This group is responsible for 25-50% of the cost of collections. Cost and potential losses are reduced by quick action.
The consumer or debtor makes repetitious, unfounded complaint. Such consumers are often better handled by a collection agency.
The debtor or consumer totally denies responsibility of the balance due. Without professional help, these accounts are normally written off as total losses.
The consumer or debtor is having marital difficulties. In this situation, the best thing you can do is place the account quickly, before the disappearance of one or both of the responsible parties.
Repeated delinquencies occur along with frequent changes of address or jobs. This group is responsible for 90% of all "skipped accounts".

As you can see, staying on top of your accounts and knowing when to pass them along is key. The sooner you place a "troubled" account with a collection agency, the better your chances of recovery.

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