Debt collection agencies are a necessity in our current business climate. Although the collection agency has always been needed, with the increasing amount of business debt being accumulated by companies, it is even more necessary for debt collection agencies to be around. An agency is called upon by companies that are no longer able to get payment for their invoices from a business. Business debt can rack up quickly with interest charges and sometimes companies that are experiencing difficulties will simply stop paying and suddenly find themselves unable to pay altogether. When that happens, debt collection agencies can step in. see this
Debt collection agencies generally buy the business debt from the company but pay only a portion of the invoice. The company is happy because it has managed to recuperate a percentage of the outstanding debt and then no longer has to deal with trying to collect – that becomes the collection agency’s responsibility. The agency must then try to collect on the full amount of the debt. If they are able to do that then they walk away richer and everyone is happy. In some cases collection agencies must eat a loss because they are unable to collect on the debt at all. Therefore, it is not surprising that many unsavoury and illegal practices have sprung up with agencies. However, remember that they are allowed to use certain methods to collect – they just are not allowed to intimidate or harass the person or company from which they are trying to collect.
The most important thing to look for when you are looking to hire a collection agency is that they follow legitimate practices. For instance they are allowed to contact a business or individual from whom they are trying to collect only between the hours of 8am and 8pm. They are not allowed to contact a person at their place of work nor are they allowed to speak with that person’s boss, colleagues, friends or family except to find out how they can reach the individual in question. They are not allowed to divulge the reason for their visit nor are they allowed to deliberately sully that individual’s name by telling everyone that the person has defaulted on their payments.
If you are not sure where to find debt collectors that follow legitimate collection practices, you can always ask around. Most businesses will have had to call upon an agency at some point and are usually more than happy to provide others with reference to good debt collection companies.
Although collection agencies have always been around, given the dismal state of current world economies, it is not surprising that the collections industry has seen a jump in growth and in business. It has also meant that a large number of unscrupulous agencies have emerged to fill the need in the marketplace. It is, therefore, even more vital than ever that you vet every debt collection agency on your short list so that you can rest assured that you are hiring only a legitimate company.