Consumer Debt Collection Agency

When all else fails, a consumer debt collection agency may be a creditor's best ally in resolving delinquent accounts. Large and small businesses, hospitals, banks and finance companies, and retailers all have trouble collecting from debtors who are short on cash. As the economy continues to wane, consumers are less likely to honor financial obligations due to unemployment and increasing interest rates. Business owners and creditors who have exhausted all internal means of collecting may turn to a consumer debt collection agency, a highly competent firm skilled at persuading delinquent debtors to catch up past due payments. Debt recovery is not for the weak at heart, but persistent professionals can coax reluctant debtors to relinquish at least a settlement sum to satisfy creditors. Efforts may include personal contact, telephoning, writing letters, or faxing demands for payment. The agency represents the interests of the creditor who pays for services either at a specific hourly rate, on a per account basis, on commission only, or at a percentage. Payment arrangements may vary from agency to agency. Creditors may choose to use one company exclusively, or contract with several to handle different types of accounts. Once an agency has been unsuccessful in resolving accounts during the term of the contract, creditors may continue recovery efforts with other companies, relentlessly pursuing debtors until monies have been recouped or litigation becomes necessary.

No matter how persuasive, collectors are prohibited by the Fair Debt Collection Practices Act from using certain tactics. Agency personnel have heard every excuse and every sob story, but they are still charged with the responsibility of recovering past due monies in a professional and equitable manner. A consumer debt collection agency may not contact debtors before or after regular business hours, usually prior to 8:00 a.m. and after 9:00 p.m. Harassing phone calls, using profanity, speaking in a derogatory manner, or threatening to involve law enforcement are also prohibited. Even if a debtor reacts with profanity, sarcasm and insults, collectors should refrain from retaliating. Romans 12:17 says, "Recompense to no man evil for evil. Provide all things honest in the sight of all men." Some collectors may try to use strong-arm tactics to force debtors to action, but the FDCPA specifically prohibits threats of bodily harm; accusations of criminal charges; or threats to garnish wages, seize property, or sell assets to collect delinquent accounts, unless creditor contracts legally permit these actions. Agencies are also prohibited from calling debtors on the job or divulging to third parties the nature of calls. Should a debtor decide to file for bankruptcy, all recovery proceedings must legally cease upon the creditor's receipt of a notice of bankruptcy from the debtor's attorney.

Credit card debt collection presents other challenges to resolving delinquent accounts. The cardholder has the creditor's merchandise, but the creditor usually has no collateral and little chance of recovering payment. Credit card debt collection efforts are more difficult because revolving charges are unsecured. Businesses can go bankrupt extending credit to consumers who either refuse or are unable to pay. Unscrupulous debtors sometimes amass large amounts of credit card charges, but have no intention of paying little more than monthly finance fees. Other consumers simply fall on hard economic times and get behind on revolving charge accounts and installment payments. No matter what the reason for delinquency, creditors can either choose to collect or eventually go out of business.

Credit card debt collection requires specific debtor information on file before beginning recovery proceedings: first and last name; address, including city, state and zip code; place and address of employment; home and work telephone numbers; and precise account information. Collectors should be aware of actual purchase prices and dates, along with previous records of payment. Additionally, a log of prior attempts by business owners to recover payment gives collectors better insight into the debtor's financial situation and reason for delinquency. Debtors are not just faceless account numbers, but people with real life situations and circumstances that might have prevented them from keeping financial obligations. A consumer debt collection agency will have far greater success if debtors feel that collectors are there to help work out a reasonable plan to resolve indebtedness and satisfy creditors. Offers to arrange installment plans, defer payments, or reduce delinquent balances may meet with more cooperation than threats to repossess purchases or file lawsuits. Credit card debt collection may involve settling for a percentage of the unpaid balance, or reducing the unpaid balance; rather than risk losing an unsecured claim in bankruptcy court. The situations surrounding an individual debtor account will determine how credit card debt collection should be pursued.

To locate a qualified collections agency, creditors may browse the Internet, check out the local business directory, or ask other retailers, business associates and financing institutions to make recommendations. Reputable agencies should be licensed, bonded and insured. Creditors can also log onto the Secretary of state web site to see if an agency is incorporated and how long it has been in business. The Better Business Bureau may have a record of customer complaints or charges of violating the Fair Debt Collection Act. While creditors must collect delinquent accounts, the key is to employ an agency that deals fairly with customers and represents creditors in a professional manner. Creditors should avoid using aggressive tactics which may negatively impact customer relations. Being an entrepreneur is hard work and uncollected accounts can be a deterrent to success; but creditors don't have to face debtors alone. A highly qualified consumer debt collection agency can make all the difference between running a profitable business or barely breaking even.

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