Finding a reputable collection agency.(extra credit)

Here are some questions to ask in order to find the best, reputable collection agency to meet your needs:

1. How long has the agency been in business? Lifespan is an indication of integrity. An agency that does not collect, or worse, collects but doesn't forward the funds will not stay in business very long. Check with the appropriate state licensing division and Better Business Bureau (BBB).

2. Is the company bonded? This provides some assurance that you can get your money if a problem does arise. Ask.

3. Is the company licensed? Look it up on the appropriate Secretary of State website. When did the company first obtain its license? However, some NACM affiliates, and perhaps other companies, pre-date licensing statutes, so check incorporation dates instead.

4. If the agency collects on your account, what is the holding period before forwarding your funds? Payments need to be held for about two weeks to make certain the debtor's check clears. What is the prospective agency's policy?

5. Does the collection agency abide by the Fair Debt Collections Practices Act? Your name is "defendant" right along with the collection agency if a suit is filed. Experienced collectors know that debtors have money, just not enough to pay everybody. The abusive collector is paid after the "firm but respectful" collector, if paid at all. An experienced collector also knows he/she is part of your sales and marketing team. It's better to collect your money without developing a bad reputation that could hurt you with good customers because, yes, bad customers do talk to good customers.

6. Will the agency keep you informed of progress and seek your input? Unless you sell your bad debt outright, you are still part of the partnership. That's right: it's a partnership. Debtors will frequently ask questions to which only the creditor has the answers. You will need to stay involved, but not with the debtor. That causes confusion and usually nets ...