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third party collection services
Third Party Collection Services: When should you use them?
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By: Arlette Measures
How to Choose a Collection Agency

It is extremely important to select the right debt collection services for a very good reason; the agency will be dealing with one of your most important assets—your customers. It is also important to find a collection agency that can fill your company's specific needs.

Because there are so many options and providers to choose from, selecting the right debt collection agency can be a time consuming process. Here are a few things that businesses should look for when choosing the right agency:

o Price: Not all collection agencies will charge the same rate or in the same way. Most do, however, set their rates based on a percentage of the total amount to be collected. An agency may charge ten percent of the total collection amount to the business that hires it. Some collection agencies only charge once funds have been collected, while other collection agencies charge an upfront fee for their services.

o Reliability: Not all collection agencies are the same when it comes to reliability and effectiveness. One of the best ways to determine how reliable an agency is likely to be is to perform a simple background check through an Internet search or through the Better Business Bureau.

o Contracts: Some collection agencies offer contract work or retainers for their clients. In such a case, the agency may work a certain number of hours each month for a set fee. Businesses need to be sure that they require a collection agency's services before they sign a long-term contract or retainer contract so that they can be sure that they get what they pay for.

o Methods: It is important to ensure that a collection agency is able to use a variety of methods when contacting debtors.Collection agencies should not only be able to approach a non-payee diplomatically through letter writing and phone calls, but the collection agency should also be able to use legal courses of action, if necessary. Many collection agencies are part of law firms, which enables them to file legal cases easily when needed.

Find out as much as you can regarding the reputation of the collection agency, whether the company is licensed and bonded, and any professional organizations the agency is a member of. Try to get satisfactory answers to such questions as:

• Is the business well established and experienced?

• What are the collection agency's published contingent collection fees?

• What methods does the agency typically use when collecting debts?

• Is the company geographically accessible to your business?

Using this information, you should be able to find a reliable collection agency that is easy to do business with and who will treat your customers with respect. Whatever type of collection agency you choose, be sure to obtain a client list before you enter into an agreement with the provider. You can also contact the Commercial Law League of America for a list of certified collection services and legal experts. To be sure you get the best for debt collection services, InsideUp can help you obtain quotes from several reputable collection service providers.

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