How NOT to Select a Collection Agency
Three of the most common ways people use to select a collection agency may well be three of the least effective. These are. . .
- You like the salesperson.
- You've heard they're the "best." " The 'best' agency for one creditor is not necessarily the best agency for another," cautions one West Coast credit manager. "While an agency may do a good job for one creditor, it doesn't mean they will do a good job for another creditor with a different situation."
- "It was recommended by another client." But that's like comparing apples to oranges. "You can't really compare performance because you don't know the other client's circumstances," he says. "For example, you don't know at what age the other client's accounts were placed. And if it was a bank card debt, you don't know the nature and details of the solicitation effort."
How to Select an Agency
This CM finds that the two keys to selecting an agency are:
- It's fiscally sound, has strong management, and operates well within the law.
- It's the best for your specific needs and situation. "By understanding your own situation, you can then assess the agency's strengths and weaknesses that complement your circumstances," he says.
"Develop your internal policies regarding agencies prior to beginning the selection process," he urges. "Then, develop standards to discuss with the agencies prior to entering into an agreement."
"For instance, if you prefer quick settlements (i.e., cash up front rather than lawsuits), select an agency that provides this. If, on the other hand, settling a legal matter is more important, find an agency that specializes in this area."
To learn five investigatory measures this expert recommends when checking out an agency, click on the link below to read the full story in our Members-only section:
How Not to Select a Collection Agency