Collecting debts from stubborn customers is not easy. You have to get alternative debt collection methods. If all other strategies have failed, consider using a debt collector. Debt collectors are different. They carry out the debt collection process different. Some may not be good for your business. This article will give you some things to consider before hiring a debt collector.
Things to consider
Some agencies only deal with large scale businesses while others are for households and small businesses. You should get collectors as per the type of clients who have defaulted. The strategies used in collecting debts from large scale customers might not apply to household customers.
There is the right way for debt collection agencies to operate. Make sure that the debt collector you choose follows the stipulated rules on fair debt collection. They must be licensed and bonded to operate in your area.
Sometimes your customer may feel that the collector used much force or used unfair collecting methods. This might lead to them taking you to court. This is why you must make sure that the agency you are using is covered by insurance and does not have arrears or omission with them. If your client happens to take you to court, you will not be answerable and liable for the collector’s actions.
The term compare means that you have a list of debt collectors with you. You should never use the first collector you meet. Make comparisons. Each company uses different ways to come up with their rates. A large number of them take a flat rate percentage of the total collected. Go for companies with no collection no fee model. There is no point of paying them if they did not get money from the defaulter.
Some debtors will run away with your money. Some won’t pick calls; others will move towns. Ask the collectors if they have skip tracing service even if the customer did not leave any address behind.