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AS A SMALL OR MEDIUM SIZED BUSINESS, COLLECTING LONG OVERDUE INVOICES CAN BE A CHALLENGING AND UNCOMFORTABLE AFFAIR…Debt collection is an even bigger concern than ever now that the economy has taken such a downturn. Greater numbers of businesses are in financial trouble and face bankruptcy. Companies that are unable to get invoices paid need to hire a collection agency in order to collect on their outstanding bills. However, regardless of the need for debt collectors in today’s business sector there are regulations that need to be followed so that debt collection agencies follow fair practices. As it is there are too many debt collection agencies that do not follow fair practices and end up with negative reputations. The Fair Debt Collection Practices Act is a piece of legislation that governs the way debt collectors should behave. Under the Act no collection agency is allowed to harass, intimidate or otherwise negatively impact the person from whom they are trying to collect. They are also not allowed to practice abusive or deceptive methods for obtaining information about the person. Therefore, debt collectors are not allowed to phone the debtor’s friends, colleagues or boss and state that the individual in question owes money. They are not allowed to continuously call their friends, colleagues or boss to find out where to find the person in question, unless the collector believes that they did not receive the correct information the first time. Debt collectors can only contact the individual with an outstanding debt between the hours of 8am and 9pm. They are not allowed to contact an individual if that person is represented by an attorney. They are not allowed to publish that person’s name or address on a “bad debt” list. No collection agency is allowed to continuously call a person with the intent to annoy that individual. They are also not allowed to employ any means of communication that can identify to others that the individual in question owes money. Collectors are also not allowed to misrepresent themselves in order to collect on a debt, for instance, they cannot say that they are an attorney or a legal representative if they are not. Debt collection is a necessity but you must be careful when hiring a collection agency. You do not want your business’ name to get sullied by the practices of unscrupulous debt collectors. Finding out as much as you can about the collectors on your short list is the only way to ensure that you are hiring a collection agency that follows the fair practices Act. If you are on the market for debt collection then you should know that you will probably only get a portion of the outstanding debt owed to you. What generally tends to happen when dealing with debt collectors is that you “sell” your debt to the collector for a portion of the outstanding invoice. The debt collection agency then takes it upon their shoulders to collect on the full invoice. If they are unable to collect the full cost of the invoice, then they lose money. It is one of the main reasons that debt collectors might resort to unfair practices, which is why you must be careful about the debt collectors you hire.
“…I generally can’t stand collection agency people, but you guys are great and gotta be the best collection agency I’ve worked with…”
-Jerry W. Integrated Financial
Fair and Ethical Debt Collection
Every business owner knows managing debt collection is key to the success of his/her business to maintain a steady cash flow. If an accepted profit level can be achieved then your company will be able to grow. You can expand to reach further customers and increased success.
One of the problems a successful company must limit and overcome is the need to cover the costs of outstanding invoices owed to you by clients. You may be able to achieve this through simply contacting the clients in question to remind or request repayment. Sometimes more effort is needed. There will be a number of cases where the process will be tenuous. You may want to investigate the the possibility of using a third party to recover your unpaid invoices.
Debt Collection Services May Be Your Best Choice
Debt collectors will be able to provide a highly trained collection agent to undertake any program on your behalf. These agencies provide a wide range of different collection services. Collection agencies maximize the likelihood of a successful recovery. This gives your company the best chance to collect your debts efficiently. Many debt collection agencies will attempt to recover your debts quickly and without the need for legal action. It is often the case that the simple realization that a collection agency is now involved will make the debtor repay the debt. However, should this not be enough on its own, they will be thorough and professional in their attempts to recover your outstanding invoices..
All certified debt collection agencies have to act within a set of regulations restricting any aggressive or intrusive practices when collecting your money. In choosing an approved collection agent you can be sure that you are not acting in an unreasonable manner in negotiating repayments.
In many cases, collection services will not cost you any future business with the debtor. This is beneficial to your company in cases where the client provides important business for your firm. However, should the debtor in question fail to repay despite honest negotiations, many debt collection agencies will offer an investigation service to determine the ability of the debtor to repay the debt. If a legal claim is necessary, it will offer legal representation or advice in putting together a successful case.
It is Important to Investigate the Costs Associated with Debt Collection
Debt collectors are very inexpensive when compared to the costs you could accrue in taking on your own collection efforts. Typically, they will offer their collection services for a flat fee or percentage which is agreed upon beforehand. This lets you relax knowing that any necessary steps in recovering a debt will not produce an extra hidden cost which can damage the benefits from recovering your money. Collection agencies may also offer advice in establishing conditions for future credit deals. Hiring a collection agent is an excellent way of protecting your company and ensuring its further success.
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