If you’re running a Business and thinking of choosing a debt collection agency (DCA), it is essential you choose the right solution. As with any Business sector, not all debt collection agencies are equal.
Maximum effort will deliver maximum results. Also, the greatest service will deliver the greatest results. But how do you arrive at this conclusion? Cheap is not cheerful as with any type of service, debt recovery or otherwise.
Performing basic checks should help you determine which Debt Collection Agency is best for your Business. Remember that selecting the wrong DCA can provide more of a headache than selecting none at all.
Debt Collection plays a very important part in modern commerce. The UK economy is getting back on its feet post pandemic and the role of debt recovery and debt collection in this is as important as ever.
6 major considerations when choosing a debt collection agency
- Are they duly licensed, authorised and accredited? – Amazingly, even in 2022 people and businesses still run the risk of using ‘unlicensed’ debt collectors. Ensure that that if you are considering using a DCA, it is a member of the Debt Collection industry’s only trade association, the Credit Services Association. (CSA) They may also be an FCA Regulated Debt Collection Agency. The Financial Services Authority regulates DCA’s that operate within the consumer marketplace so it is not always essential for Commercial Debt Collection.
- Reputation – As with any industry, a long standing and proven track record in delivering a quality debt collection service should be evident. A quick 10 second search on google will deliver insights into the reputation of your business. Trusted Debt Collection Agency reviews can be found on sites such as Trustpilot and google my business amongst others. The DCA that you collaborate with will be an Ambassador for your Business!
- Cost and its relevance – A transparent costing policy should always be of interest. Understand what you are paying for and what you will get in return. As all DCA’s have different charging structures, it is important to compare apples with apples. Key questions to be asking are, is your service comprehensive (no hidden collection fees) what is the commission rate? Is there an account set up fee? Typically is there is an instruction fee or such like, it will be reflected in a subsidised commission rate taken from recovered monies.
- Working knowledge of your industry – To maximise results, it is highly recommended that the DCA you employ already has active working knowledge of your business sector. They will then understand the protocols, nature of debt and usual questions that arise from unpaid accounts. They can help speed up recovery and avoid ambiguity.
- Understand the DCA’s service – A big effort will deliver big results but you will need to know what the methods of the DCA are. Usual methods of Debt Recovery can include letters, emails, phone calls, Texts and possibly even visits from an appointed field agent. Failing a standard resolution, it could be that legal action is necessary. Obtaining a default judgment on your behalf will speed up enforcement. Note: It is critical you avoid overly aggressive Debt Collectors – this can and often will create problems for the instructing party and debt collecting complaints. We refer you to our first and second ‘tips’.
- Keeping track of progress on cases – Very often an oversight initially but very important. If you are looking at passing over many cases, you will want to be kept well informed. Any Professional DCA will have a fluent progress reporting service, either by regular reports and/or an online portal for you to log in and monitor progress.
Remember, choosing a debt collection agency should be a decision conducted like anything else. Research, due diligence and a tactical approach. A Professional, reputable Debt Recovery service that is well versed in your industry and a reasonable and transparent costing policy can add massive value to the bottom line of your business.
It is always advisable to avoid some of the no win no fee debt collection charlatans that plague the industry. Nothing comes in life for free and these ‘free debt collection’ services are very often over aggressive and come with a hidden price tag. This can be excessive fees, your business reputation and risking the well being of your business.