Tag Archives: collection agencies

Why Do Some Collection Agencies Charge More?

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Dollar sign, Collection Agencies, C2C ResourcesCollection Agencies do not all operate in the same way

We all like a good deal. We love to save money. So, while it’s tempting to choose a Collection Agency charges you less, it’s the net recovery rate that really matters.

Licensing
There are some key factors that drive the rates a collection agency charges. For instance, it costs time and money for an agency to obtain the proper licensing. Since licensing protects you and your business, it’s worth it to pay more.

Collectors and caseload
You’ll also pay more to partner with an agency that uses only experienced collectors. High caliber collectors will cost a little more but you’ll enjoy the benefits of a higher rate of collection. Savvy collection agencies will carefully restrict a collector’s caseload, too. By doing so, all cases, large or small, received the attention they deserve. This strategy requires that an agency hire more collectors and possibly charge a higher rate, but fewer accounts are turned over to legal.

Remittance
Some collection agencies that charge less do so because they only remit monthly. They hold onto your money and collect interest on it while saving themselves the expense of weekly remittance. Agencies that remit weekly may cost more but you get your money much more quickly.

Information
Collection agencies that invest in the personnel and technology needed to keep you in the loop on your account will also cost more to partner with. The type of software required to make your information available to you has a price tag.

When looking for the right agency, ask the right questions so you understand their rates. Are they licensed? Are their collectors experienced? How do they manage small balance accounts verses large ones? Do they remit monthly? Weekly? How many collectors touch each account? What are their communication policies? Do you have access to your information when you want it and need it?

You’ll pay more for the qualities that put an agency a cut above.

 

Is Your Commercial Collection Agency Licensed?

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How can you know for sure that you collection agency is a quality company? Ask if they are licensed!

Not all Collection Agencies are created equal. There are many top-notch agencies all over the country and a whole bunch of sub-standard ones. A quality collection agency will obtain a license to do business if their state requires it.

US Map, C2C Resources Debt Collection AgencyOver 20 states do require commercial collection agencies to be licensed. Oddly enough, many agencies ignore the law!

The issue of licensing should be top of mind when choosing a commercial collection agency. The reasons are simple:

1. It’s the law.
The laws vary from state to state but some requirements may include: registration and testing of agency personnel, audit of collection procedures and letters, agency bonds, and most importantly trust procedures and audits to make sure that your money is safe.

2. Your reputation can be affected.
In your customer’s eyes, your collection agency becomes an extension of you. You want collectors to represent you in the most professional, ethical way possible. A licensed collection agency is held to a high standard and will take pride in how they do business.

3. You may be liable.
A Collection Agency that does not adhere to the laws can be a liability. Your debtor could sue you both based on the actions of your Collection Agency. A licensed agency will operate within the laws in the effort to collect on your behalf.

A Collection Agency that is licensed can provide a copy of their state issued certificate easily and what’s more, they’ll be proud to do so! If they can’t, ask them what the requirements are for the state in which you are doing business. Any collection agency that cannot answer that question isn’t the one for you. Keep shopping!

Protect yourself and your business by choosing a collection agency that is licensed.