Debt recovery companies used to be called bill collectors or collection agencies but debt recovery is more accepted term these days. When a company holds a bad money account for an extended period of time, it will probably turn the account over to one of the many collection agencies which will attempt to collect at least a portion of the money owed the business. Countless stories have been written and anecdotal testimonies have been told regarding the strong arm tactics that collectors have taken in the past to secure overdue account money. Thankfully those days seem to be passed, due in part to recent laws passed by Congress to rein in these intimidating ways to collect money. The federal Fair Debt Collection Practices Act has insured that debt recovery companies comply with strict standards including the end of threats and harassment.
When a company uses one of the debt recovery companies is really up to each company and their tolerance for unpaid accounts. Some companies do not wait over thirty days. Other companies and businesses wait up to a year while working with delinquent accounts until their patience runs out. One of the most trying parts of a business handling their own collection process is the constant and often draining communication that must go on with the debtor to try and collect revenue. But once a company does decide to turn over the collection process to a recovery company, the communication responsibility becomes a non-issue for the company that is owed payment.
Since a company must pay the collection agency either a flat retainer fee or a percentage of the recovered debt, the business must have some clear signals as to when the time is right to employ the collection service. The following are some of the indications that debt recovery companies must be employed. After a customer has not paid and contact from the company is made, the customer begins to make complaints about the product or service, usually with groundless charges. The customer begins to deny that any money is owed the company. The customer doesn't respond to notices in the mail or hangs up on company phone calls. And of course the big one is when the customer moves and leaves no forwarding address or changes phone numbers.
In recent years, debt recovery companies have learned that showing a softer side has actually helped in recovering more of the lost revenue for their clients. Some agencies have combined their recovery business with debt counseling services, helping debtors to restructure their debt. Restructured loans then become easier to handle and companies can retrieve high percentages of lost revenue. Other collection companies have expanded to include billing and accounting to enhance their own marketability. One of the recent trends in recovery of outstanding debts is the specialization of certain types of loan defaults. When dealing with student loan defaults, certain government loans and even some medical bills, specific information is needed and particular methods of recovering such debt is called for.
If a company is going to hire one of the many debt recovery companies, a few things should be kept in mind. First, references should be checked thoroughly to see if the collection agency conforms to an image with which the hiring company is comfortable. Secondly, all accreditation and licensing should be verified. Then, if the debtor is now in another state, jurisdiction for collecting in that state should be verified. Finally, a client should look at all the written information that will be sent to account debtors to see if it has the image the client wants to convey to its wayward customers. Letterhead with crossed swords at the top may not be the image that will sway the debtor! Jesus made it clear that His authority is eternal. "Heaven and earth shall pass away, but my words shall not pass away." (Mark 13:31)
Unfortunately, not all debt recovery companies adhere to the fair collection practice demanded by federal law. So what is a person to do if confronted with a bullying bill collector? Initially a person must know his rights under the law. Many online websites are ready and willing to help with excellent advice in dealing with unfair collection practices. In general, the advice includes things like keeping one's cool when speaking to the person, which may prove to be very difficult if the collector is abusive in tone or language! Limiting answers to very brief lengths is also important and this includes not giving out any personal information of any kind. Experts also suggest that when talking to a collector that no sob stories be unveiled because the collector has heard them all!
Debt recovery companies are the last link in the chain before someone usually declares bankruptcy or skips town to avoid the hassle. But there are some steps that a person can pursue before having to worry about whether the next phone call is from the "Gotcha!" collection agency. One of the first steps is to seek out a free counseling agency that will sit down and help sort out all of the numbers. Often times it just takes an outside resource person to help sort out the hidden issues. But a person mired deep in debt must also be willing to think outside the box and be willing to take on a second job to pay down debts or sell possessions. As daunting as this all might seem, it is a mountain that can be climbed!
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