What Small Businesses Should Look for in a Debt Collection Agency
Choosing the right partner matters, so use this small business collection agency checklist to compare your options before you sign a contract.
Five Things to Check First
- Licensed and bonded: Confirm the agency is licensed and bonded in your state. This means they’ve met the legal requirements to operate and have agreed to pay you if they lose your money.
- Experience: Choose an agency with experience collecting debts in your industry. They’ll be more familiar with the laws that apply to your business.
- Success rate: Ask for their success rate. This gives you a clear idea of how likely they are to collect your debts.
- Fees: Understand the fee structure. A trustworthy agency is transparent about fees and willing to explain them.
- Customer service: Make sure the agency is easy to reach and responsive when you have questions.
Because every agency handles accounts differently, it also helps to ask a few direct questions before you commit.
Questions to Ask Before You Sign
- What are your methods for collecting debt?
- How long do you typically take to collect a debt?
- What are your success rates for collecting debt?
- What are your fees?
- What are your policies on reporting to credit bureaus?
- What are your policies on communicating with debtors, and how do you stay compliant with the FDCPA?
By working through this small business collection agency checklist and asking these questions, you can choose a partner that complies fully with the Fair Debt Collection Practices Act (FDCPA) and is genuinely right for your business.
At New World Collections we are experts in all aspects of bad debt recovery. We have the answers! Contact Us
