When hiring a commercial debt collection agency, due diligence sets your organization up for a successful partnership. Here’s what we recommend when evaluating your options for a debt collection partner.
1. Check for Industry Alignment and Compliance
Many debt collection agencies have specific industry experience. Some work to help resolve insurance overpayment, others focus on commercial accounts receivable, and others are uniquely qualified to work with healthcare companies. Checking for industry alignment ensures the learning curve isn’t as steep and can protect you from undue liability. For example, a company with experience in healthcare AR management will be used to working in ways that are HIPAA compliant.
2. Check Their Professional References and Ratings
When meeting with a potential debt collection partner, check for their performance ratings. How is their Better Business Bureau rating? Do they have any outstanding complaints or issues? Have they ever been reported to the Consumer Financial Protection Bureau? During your initial meeting, asking for their credentials and checking their professional references can help you identify concerns early and avoid making costly mistakes.
3. Know Their Success Rate (and the Industry Average)
Knowing the success rate of a debt collection agency helps your team set expectations. Fair Capital reports: “According to recent statistics, the average success rate for debt collection agencies in the United States is around 20-30%. Therefore, it is reasonable to estimate that a typical debt collection agency will recover an average of $20-30 for every $100 in outstanding debt. A survey conducted by the ACA International in 2014 reported a 21.7% average industry-wide success rate.” If they quote you a much higher success rate, your reference checks will bear out how accurate that information is. If it’s much lower, you’ll know they likely aren’t a good fit.
4. Ask for Work Samples
Asking for samples is a way to see clearly how a debt collection agency works. You’ll know if they’re following debt collection agency best practices if they show you thorough, compliant, and ethical sample materials. Samples you might request include contracts, reporting templates, and codes of conduct.
5. Examine Their Fee Structure and Processes
As with any partnership, you’ll need a clear understanding of what a prospective debt collection agency will charge your business for their services. How much will they recover per debt collected? What is their process for challenging collections? How are they protecting consumers and companies from exploitation and scams? Asking questions like these in your initial interview will point you in the right direction, whether it’s toward or away from that potential partner.
Experience You Can Trust
Capital Recovery Corporation is trusted by multiple industries for ethical, compliant commercial debt collection services. We’d love to help your business get better results with improved accounts receivable outcomes. Ready to move forward? Request a consultation with our team.
We follow the Fair Debt Collection Practices Act (FDCPA) and are HIPAA compliant.
Capital Recovery Corporation – NMLS No. 1666542
Developed by SharpShell Digital