At BBB, we’re often warning consumers to be wary of overly aggressive, disreputable collection agencies. There’s a reason for that – debt collection agencies are one of the most complained about industries to the BBB. In fact, in 2013, the BBB received almost 21,000 complaints against debt collectors – 334 were from Wisconsinites.
But, we shouldn’t reserve our warnings just for consumers. Businesses need to be wary of hiring disreputable collection agencies, too. After all, a bad debt collector can do some serious damage to your company’s reputation. Your collection agency should represent your organization in a responsible and professional manner, and provide a satisfactory rate of recovery while maintaining your public image.
Here are four tips to hiring a reputable collection agency:
Do your research
Of course, you’ll want to check out the company with the BBB. A company that’s accredited by the BBB has a track record of being a reputable company and abides by our Code of Business Practices. Also, the collection agency should be experienced in your specific industry.
Verify the Agency’s Legitimacy
Collection agencies are required to be licensed by Wisconsin’s Department of Financial Institutions. Make sure the ones you want to hire are bonded, licensed and adhere to the rules of the Fair Debt Collection Practices Act. They should also be properly insured, in case the debtor sues. You want to make sure that you won’t be held liable for hiring the agency.
Ask about the collection process
If you hire a collection agency, its training and collection procedures should be an open book. How will your customers be contacted, how often, and in what manner? Will the company provide you with regular reports on its activity? Does the company screen and perform background checks on potential new employees?
Compare Fees and Costs
Make sure the company’s fee structure is clear and in writing. Is it a flat fee or a percentage of what it collects? Are there any other fees or related costs?