Collection Agency Success At Collecting
The most important thing you care about is how good the collections agency is at collecting. As an industry, the results are not impressive, and that is an indicator of just how difficult it is to collect on past due accounts:
Since 1999, the debt collection success rate has ranged from 11% to 19%, so these results are consistent. Retail collections dominate the statistics. But commercial claims against businesses that close and small claims against family run companies adversely impact success rates.
An agency can claim any success rate they want – there is virtually no way you can verify it. When we say The Kaplan Group has an 85% success rate on claims over $10,000 against open businesses, we don’t have any way to prove it to you. If we included claims given to us where the business was already closed, that would drop our success rate below 50% and yet there was no way we can collect against a closed corporation. And our debt collection success is a bit less on smaller claims when the threat of litigation is not as meaningful.
No agency can defy the odds and have a 90% success rate on all claims. And no one can guaranty they collect better than everyone else. Generalized statements like this are sales tactics and not substantive.
Since you can’t verify success rate claims, the two factors you can assess are:
- Debt Collection Process
Next: Assessing Reputation