A customer or patient isn’t paying his or her bill, and after a few months of mailing letters and making calls, you decide to turn it over to a commercial debt collections agency.
Your business debt collection agency makes every effort with calls and letters. Yet, due to a governing regulation called the Fair Debt Collections Practice Act (FDCPA), debt collection agencies are held to a different standard when communicating with debtors than first-party creditors are.
These debt collection laws under the Federal Trade Commission protect both the debtor and the original creditor (businesses). Although, also due to changes in technology, it’s becoming more difficult for consumer debt collectors to make effective connections than ever.
What can you do? Let’s find out together.
Commercial Debt Collections: The State of Mail and Phone Calls
First, let’s look at what’s not working. A study by the US Postal Service found just about what you’d expect: younger people interact less with so-called snail mail (paper mail) than older people. While most people agree they love to receive fun mail and cards from friends, they aren’t paying a lot of attention to notices and bills, especially calls from unknown numbers.
Meanwhile, with a rise in spoof calls, only 52 percent of calls Americans receive on their phones are picked up. A study found that the pick-up rate for calls from people saved in contacts is 70 percent. About 53 percent of calls identified as a business are answered. Yet, if a call is neither, or unidentified, it is far less likely to be answered. A strong possibility is, a person knows it’s commercial debt collectors and they are choosing to ignore them.
Get Customer Data First
It is ever so critical for you to have patients/customers fill out intake forms and complete applications if obtaining credit or financing. Yes, even small business owners. Depending on your type of business, you may not want to ask for various ways to reach people. On the other hand, in healthcare and other industries, it is perfectly acceptable and certainly necessary to gather contact information and consent at the start. Below is what you need to obtain, even if you are not working with commercial debt collections.
- Consent – The Fair Debt Collection Practices Act regulates the manner in which third parties such as collection agencies communicate with your customers if you were not originally provided this information. Capturing this at intake provides the collection agency with expressed consent for future contacts to be made in various forms.
- Address – You probably already ask for this but having this allows another level of confirmation in the skip tracing process.
- Phone Number – Ask for more than one and denote which are landlines versus cell phones. New rules are being proposed that will allow cell phones to receive collection texts for payments. Identifying this in advance saves a lot of time and effort in the collection process.
- Email Address – Try obtaining personal email addresses as it is against FDCPA to email debtor at their place of employment.
- Social Security Number – Many people have the same first and last names, and others change their name (marriage, divorce). The SSN will later help confirm we have the correct person.
- Date of Birth – Again for identity confirmation.
Commercial Collection Agency: What Else a Business Can Do
Younger people prefer convenience above most things, and it’s true for paying bills.
- According to the postal service study, most millennials prefer online payment. If your company does not have a way to pay online, consider implementing it. While you will have to pay processing fees, your bill pay rate will likely increase.
- Allow consumers to split larger payments into two or three.
- Or, consider setting up payment plan options with automatic withdrawal, so you feel confident you will get a payment each month.
- Check out our other tips for collecting overdue payments.
Obtaining consent and various forms of communication is far more effective at the start of your client relationship. It will vastly improve collection rates, whether it’s your team or a collection agency.
If you need help with cash flow and past due consumer debt settlement, contact commercial collection firms. Capital Recovery Corporation (CRC) is a premier commercial debt collections agency that will help immediately to start tackling your old payments. Contact CRC so we can help your business before it’s too late.