How to choose the right debt collection company to help? What to look for in order to recover money quickly and effectively? Here, we outline the key aspects to consider:
Digital management
Professional agencies use online platforms that allow starting the collection procedure fast and without unnecessary formalities. Absence of online tools and excessive formalism may indicate company’s technological deficiency, slower pace of work and finally, lead to weaker results.
Access to updates
As a client, you should be able to contact the agent handling your case directly and access information regarding collection progress easily. Currently, internet platforms that provide an online access to information on the case their effects are a standard.
Specialisation The debt collection industry in Central Europe falls into two groups of specialisations. With B2C companies focusing on mass-scale recovery from portfolios and B2B agents handling individual cases extensively. Agency effectiveness hinges on market knowledge, practices, distribution channels, and appropriate procedures and tools. The narrower the specialisation (i.e. in a specific industry), the higher the success rates.
Time
It is worth to remember that the chances for successful recovery get lower as the time passes, therefore amicable actions should be performed for maximum of 60-90 days. If debtor does not pay within this period, the case should be transferred to a legal proceeding automatically.
Legal assistance
If amicable collection proves to be unsuccessful, it is usually possible to pursue the claim in court. The agencies that have their own law office will be much more effective than the ones that forward the cases to a third party. Professional agent will always advise what should be done in a specific case. They will also counsel on how to secure receivables from loss, or how to secure risky operations.
Payment for collection
When selecting an agency, check whether the company recovers additional costs (i.e. interest and collection costs). Recovering those from the debtor results in a procedure free of charge for the creditor. Collection agencies work on a “success fee” basis, meaning a commission from the recovered amounts. It is usually ca. 15%. The higher the overdue amount and younger debt, the lower the commission.
Field collection and Investigation services In order to carry out collection activities efficiently, agencies have to be provided with updated contact details and information about debtor and their assets. Field collection and detective services are an essential help at every stage of recovery and should be conducted only by licensed professionals.
Experience
Debt collection is a field that requires good understanding of many areas: local and international law, economics, banking, communication, psychology, logistics, modern technologies. Many years of practical experience validate company’s competences.
Bear in mind, that a chosen collection agency becomes the creditor’s representative.
Ethical collection without burning bridges Debt collectors should abide by the rules of law and ethical norms. The company’s membership in European organisations such as FENCA or ECA is a guarantee that the agency would recover liabilities in an ethical way, without an interference in future business relationship with the debtor.
Reputation, credibility
It could be helpful to search for opinions and references from recent clients. There is nothing more convincing than a recommendation from trusted colleagues in the field.