1982 Hemmeter
Saginaw, MI 48638

Phone: 989.799.8500
FAX: 989.799.0260

Selecting a Professional Collection Service

Choosing a professional collection service to collect your delinquent accounts requires careful consideration.  The decision involves more than simply awarding your business to the lowest bidder because the quality of the service you use will affect both your bottom line and your public image!  Also, getting the most from a collection agency requires mutual cooperation and good communication.  Here are some facts to consider:

References and Reputation
 Ask for at least two references, preferably in the same or similar business that you are in.  Find out whether the firm has a good reputation in the community with merchants, the Better Business Bureau, and the Chamber of Commerce.

Membership in Trade Associations
Look for membership in state and national trade associations, such as the American Collectors' Association, Inc. (ACA).  Membership in organizations like the ACA ensures that the firm has been screened by that organization prior to acceptance.  Also, ACA members agree to adhere to the associations' code of ethics, which covers client relationships as well as proper handling of consumers.

Compliance with Licensing and Bonding Laws
Check whether the firm has complied with your state's licensing and/or bonding laws, if any.  If state licensing and bonding is not required, check references and length of time the agency has been in business.

Rates and Recovery Percentages
Rates and fees are usually charged on a contingency basis or on a combination of up-front fees and a lower percentage.  Selecting a collection firm solely on the rate charges is not the best decision.  A firm that charges a low rate may not work your accounts as thoroughly and may collect on fewer of them.  A firm that charges a higher rate may work accounts more thoroughly and recover more of them.  The most important consideration for any creditor is the net return based on a combination of rate and recovery.

Collection Procedures and Policy
Ask what procedures the firm uses to collect, including when it starts work on your accounts after receiving them.  Also ask about the collection letters it uses, and whether it has trained telephone collectors and skiptracers. 

Collector Training and Certification
What training do the firm's collectors receive?  Are they educated in effective, professional collection techniques?  Do they know how to comply with the federal Fair Debt Collection Practices Act (FDCPA)?

Remittance Schedule and Reporting
Find out at what intervals the firm will be remitting funds to you that it has collected on your behalf.  Also ask about account status reporting to find out what procedures and capabilities the firm offers.

Skiptracing and Forwarding
How does the collection firm locate debtors who can no longer be reached at the address or phone numbers listed on their accounts?  Find out about the firm's skiptracing capabilities.  Also, what are the firm's procedures regarding forwarding of accounts--the referral of accounts to another collection service in the locale to which a debtor has relocated?

Special Services
Ask about client services that the collection firm may offer.  Some firms offer client seminars or consultation on developing effective credit policies, precollection and other credit and collection-related topics.