If you or your business are owed money, it pays to think smart in terms of using a Debt Collection Agency.
You have a Business and a life to operate so dealing with unpaid debts is a unnecessary stress. Being ‘owed money’ is a drain on your time, energy and resources.
Using a reputable Debt Collection Agency (DCA) will save you time, energy and money. The problem is that not all Debt Collection Agencies are created equal.
We have collated what we believe to be the top 5 tips for when looking to hire or use a Debt Collection Agency.
Top five tips
- Varying types of Debt Collection Agencies
Different Companies will have different areas of expertise as with any business sector. For example, some specifically deal with Business to Business Debt Recovery only whereas others will only deal with consumer debts.
2. Is the Agency legitimate?
As with any industry, there are rogue operators and the Debt Collection industry is not immune to that. Ensure that any Agency is appropriately licensed by bodies such as the Financial Conduct Authority and has a Data Protection Licence.
All top Professional DCAs are Limited companies for their clients piece of mind. They will usually have been operating for a number of years.
They will also be members of the Credit Services Association, the UK’s only trade association for the Debt Collection Industry
3. Check out their reputation
Are they ethical? Ethics is a massive factor when choosing any service provider.
Know who you are dealing with. Conduct your own due diligence and check out their reputation on the internet to find out what people are saying. This should never be an after thought.
4. What actions will they take?
Some DCAs will only send emails to your debtors whereas others will take a more formal assertive approach.
You need to be mindful that any DCA you instruct are going to be an ambassador for your business. This is why it is VERY important to use a professional company only.
Be clear about additional actions with debt collection such as tracing, site visits, court action etc
5. Know the cost from outset
You should be using a DCA that is very clear at outset as to the cost. Some offer a low fixed fee comprehensive service with a low commission rate. Others will claim to offer a No win – No fee service with a high commission rate. Either way, read the small print and know the position so you do not get stung by any hidden fees or a drip pricing policy.
Make sure you are aware of all costs you will be liable for including any ‘abortive’ fees if the debt is not collected.
The fact of the matter is that Debt Collection Agencies in the UK recover Millions of pounds every year.
You would not just employ ‘anybody’ to work in your business so should not just employ ‘anybody’ to work for it.
You need to be realistic about your expectations and work with your chosen DCA as a Business partner with a shared common objective.