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Referral
to Collection Agencies
Collection
agency fees vary widely - even if their services and their collection
results do not. There are a wide array of collection techniques used by
collection agencies ranging from mailing out dunning notices, to making
a few collection calls, to sending a collector out to visit the debtor's
place of business (one or more times) to discuss the status of the past
due balance.
It is important
that whatever collection agency you select have these characteristics:
- It should
be professionally managed
- It should
be experienced
- The agency
should be licensed and bonded
- Collectors
employed should be screened for their temperament and their communications
skills
- The agency
should act in your best interest, and not its own
- It should
be affiliated with one of the nationally recognized group that offer
accreditation to collection agencies
- The collection
fee structure should be competitive
- Collections
should be done on a contingency basis
- The agency
should provide periodic written updates on its collection efforts
Agreements
should be put in writing covering these issues:
- How soon
after the collection agency receives payment the creditor company will
receive its money.
- That no
settlement or payment plan will be made with a debtor without express,
written approval from the creditor.
- That no
form of incentive or gratuity will be offered or given to any member
of the credit department for using the collection agency.
- That all
communications and correspondence with the debtor will be handled in
a professional manner and that threats and violence will never be used
to collect balances owed.
Source:
Michael Dennis, author of "Credit and Collection Handbook" available
at the NACM Bookstore. |
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