The dreaded collection agency
May 2, 2007 11:42 PM Subscribe
I have been charged with finding an outside collection agency for my company. There is so much information out there, I have no idea where to start.
My company is in Illinois, but we will be collecting from customers all over the country. I've checked out a few using the agency that Illinois uses to license collection companies and can see that none have had their licenses revoked or have been disciplined by the state.
But do I go to looking at fees from there and pick the one that charges the lowest amount per collection? Has anyone ever had to do this for their own job? How did you pick yours? Or even recommendations on national agencies you've used in the past?
My company is in Illinois, but we will be collecting from customers all over the country. I've checked out a few using the agency that Illinois uses to license collection companies and can see that none have had their licenses revoked or have been disciplined by the state.
But do I go to looking at fees from there and pick the one that charges the lowest amount per collection? Has anyone ever had to do this for their own job? How did you pick yours? Or even recommendations on national agencies you've used in the past?
In my experience, you aren't really hiring the collections agency, but are rather selling them the debt. My company uses Armsco with good results.
posted by dr_dank at 6:38 AM on May 3, 2007
posted by dr_dank at 6:38 AM on May 3, 2007
Collection agencies are evil
This is bullshit. People and companies who obtain good and servies but don't pay for them are evil. Collection agencies are an unfortunate part of doing business.
Have you tried opening the phone book and calling around? When we need a debt collected, that's what we've done. They'll tell you what their policies are and how much they charge. The ones we've dealt with didn't charge unless they collected.
If you're concerned that the company you're dealing with may not be reputable, contact the Better Business Bureau, or ask for a list of references.
Depending on what sorts of clients you're trying to collect from, the agency may have no better luck than your business at recovering the debt. We've had to use a collection agency five times in the past two decades (at a million-dollar a year manufacturing firm), but have only recovered one debt. (And, of course, a large chunk of that went to the collection agency.)
posted by jdroth at 10:36 AM on May 3, 2007
This is bullshit. People and companies who obtain good and servies but don't pay for them are evil. Collection agencies are an unfortunate part of doing business.
Have you tried opening the phone book and calling around? When we need a debt collected, that's what we've done. They'll tell you what their policies are and how much they charge. The ones we've dealt with didn't charge unless they collected.
If you're concerned that the company you're dealing with may not be reputable, contact the Better Business Bureau, or ask for a list of references.
Depending on what sorts of clients you're trying to collect from, the agency may have no better luck than your business at recovering the debt. We've had to use a collection agency five times in the past two decades (at a million-dollar a year manufacturing firm), but have only recovered one debt. (And, of course, a large chunk of that went to the collection agency.)
posted by jdroth at 10:36 AM on May 3, 2007
Some places will buy debt. Other places (like the firm where I worked) take their cut as a percentage of what is collected. I don't know what the percentage was (since I didn't handle that part of it) but I think it was something like "X% of the first $Y collected, and then Z% of the next $Q collected".
You'd probably have to put some money upfront to pay fees (recording costs, filing fees, etc) but that can be added to the dollar amount any judgment that's filed.
posted by Lucinda at 12:35 PM on May 3, 2007
You'd probably have to put some money upfront to pay fees (recording costs, filing fees, etc) but that can be added to the dollar amount any judgment that's filed.
posted by Lucinda at 12:35 PM on May 3, 2007
One more thing - if you decide to use an attorney rather than a collection agency, this site might help: National Association of Retail Collection Attorneys. We used that site when we were finding firms to collect on our out-of-state files.
posted by Lucinda at 12:52 PM on May 3, 2007
posted by Lucinda at 12:52 PM on May 3, 2007
This is bullshit. People and companies who obtain good and servies but don't pay for them are evil. Collection agencies are an unfortunate part of doing business.
The collection agencies who know the law and flout it are evil. Unfortunately, they ruin the reputation of the other half of collection agencies.
posted by oaf at 11:57 AM on May 12, 2007
The collection agencies who know the law and flout it are evil. Unfortunately, they ruin the reputation of the other half of collection agencies.
posted by oaf at 11:57 AM on May 12, 2007
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And we were not evil, amyms, thank you very much. We didn't break any laws, we were as polite and reasonable as the people who owed money would allow us to be.
posted by Lucinda at 4:49 AM on May 3, 2007