Evaluating Collection Agency Success – The Collection Process:
There are several items to consider a collection agencies process to determine if it is a good fit for your outstanding receivables. This includes:
- Is the agency flexible about the approaches they use?
- Do they use a standardized or custom approach on each claim?
- What is the management oversight on claims?
Rigid or Flexible
Some collection agencies are very rigid with the approaches they use. They are not willing to make changes for anyone. Others are very rigid except for large clients, where they are willing to create a standardized approach for that client’s claims. Other agencies are flexible, willing to consider the specifics of a client’s business or a particular claim in and customize the debt collection process accordingly.
Agencies with rigid approaches find it easier to manage larger staffs and larger claim volumes using this method. This can result in lower costs for clients and be effective as long as the approach is appropriate for that client’s problems. But, if you are not convinced the existing rigid approach will maximize the collection success on your receivables, it is better to find a agency that is more flexible
Standardized or Custom Approach to Debt Collection
A Standardized Approach can be Cost Efficient
- No analysis of the debt – the debt collector just knows that money is owed.
- Bulk mailing campaigns – standardized collection letters
- Predictive Dialer makes the calls
- Random Assignment of answered call to any available debt collector
- Pre-Defined number of calls
- Standardized Scripts read by debt collector when making calls
Debt Collectors must comply with the stringent rules in the FDCPA. Agencies must take a rigid, standardized approach to avoid violations.
A Custom Approach includes:
- Advance Preparation : A thorough review of the information provided by the client (creditor) prior to making the first contact
- Research into the debtor circumstances – this includes the business and the owner in commercial collections
- Collection plan is developed based on this information
- Variety of contact methods:
- Telephone, e-mail, fax
- Call business, mobile and home telephone numbers
- Use a variety of area codes to call from so that debtor doesn’t avoid answering the call
- Establish Communication is first priority. The debt collector knows how to get the debtor communicating initially and on follow up contacts
- Listen, probe and understand: The collector knows that knowledge is power
- Convert Claim into Cash: The collector use all of the techniques above to figure out the best approach to successfully get payments out of the debtor
This custom approach is an absolute necessity on larger claims. At The Kaplan Group, we believe this custom approach is the key to our outstanding collection success rate on business to business claims of all sizes.
For larger agencies, it is extremely difficult to hire and train large numbers of debt collectors capable of using this custom approach. Thus, they tend to use a more structured process. Smaller agencies typically can give more personal attention to a specific claim.
How to Select a Collection Agency