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Should You Hire A Collection Agency To Recover More Debt?

Posted March 13, 2013 by inna to Debt 0 0
This post was written by a EasyFinance.com Community member. The views expressed below may not reflect the views of EasyFinance.com.

A collection agency is hired by the creditors when the payment is not made in a timely manner by the borrower. The money lending companies have other aspects of the business to concentrate on, and in most cases they hire a third party to take care of the collection for the credit accounts. In rare cases, though, these companies might also have their own division for debt collection. The commercial collections agency also helps in collecting debt, when a person or business does not pay for services rendered, or for the product purchased on credit. They generally charge a certain fee or a percentage of the money recovered from the debtor.Companies issuing credit or other businesses hire a collection agency for different reasons. In the following scenarios, the recruitment of a collection agency to retrieve unpaid fund seems to be useful:

• When the customer fails to pay as agreed or after they ignore paying the debt after being duly notified with a demand letter.

• If the customer disconnects the mobile or landline phone without notifying the lender. In more serious cases, there is not a new listing for the debtor.

• Disagreement with terms of sale is another common tactic adopted by debtors to delay paying the debt. It happens quite often when the terms of agreement are not explained or signed before the shipment of goods. You should notify the customer for immediate resolution prior to hiring a third party for collection.

• When the customer declares the inability to pay off the debt and is unable to provide any particular date for payment, it is a clear indication that you might need to acquire a third party debt collector.

• If the customer commits to take care of the debt but fails to make any realistic schedule for payment it is wise to introduce a third party and appoint a collection agency.

• If after the shipment of the merchant the customer raises a point of dispute, which he did not mention before, you should immediately retain a collection agency.

There are many complaints about the debt collection agencies and in some cases their recruitment might go against you. Consider adopting following precautions to avoid any hassle from the customers’ end:

• Provide the collection agency with all the correct detail about the customer.

• Make sure that the collection agency knows about the nature of your business, what kind of service you provide, or what type of goods you sell.

• Only one collection agency should be given the responsibility of a single account.

• Clear the terms of payment with the collection agency. Remember, payment is dependent on their success, and not on the amount of time they spend to recollect the money, as this whole procedure can be time-consuming.

• After you transfer the responsibility of commercial debt recovery to a collection agency, make sure that the customer understands that all contact will be with them for payment related to the debt, and not with you. This will give credibility to the collection agency and avoid any confusion and excuses related to nonpayment.

When you are unable to handle a disputed account by yourself, assign the responsibility of collecting debt to a collection agency. You will get all or most of your money back without any hassle.

It is best to transfer the responsibility of an unpaid account to the collection agencyfor recovering the money without wasting much time and energy.

About inna: Joe Clooney is the ex-manager of a renowned bank of London. He has hired third party collection agencies on numerous occasions for collecting unpaid debtors of the bank. He writes regularly on websites and blogs concerning his experience as a banker.

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