What Type of Service do you Need?

Let’s face it there are many different types of debt collection services out there. Figuring out which one is right for you is the key to getting the job done quickly and correctly. The answers to the following questions will help determine what type of agency is best for your needs.

Number of Claims

The first question is, how many accounts need collecting right now? If you have 10 or less, you probably want a small collection agency (defined as 10 or less debt collectors) so that your business is important to the agency. These claims are not likely to get ‘personal’ attention in mid-size (defined as 11 to 50 collectors) or large (over 50 debt collectors) collection agencies. The graph below shows what size agency typically best fits with the number of claims you have.

Size of Claims

If your claims are small, then you need a collection agency that has very automated systems, including automated letter campaigns, predictive dialers, and possibly script-reading tele-collectors. If your claims are large, you need a specialist and you want to talk to the person who is actually going to do the collecting.

Type of Debt

There are some types of debt that can best be handled by a collections agency that has procedures and debt collectors in place specifically for these categories. It is not necessary that the collection agency specialize solely in a particular category. But, in some cases it is important that they have deep experience and work these types of claims every day.

  • Credit card
  • Education
  • Funeral/ deceased
  • Government
  • Insurance
  • Medical
  • Rent or HOA
  • Utilities

Who are you collecting from?

There is a huge difference in collecting from individual consumers versus businesses. There typically is a significant difference between the average consumer and the average business owner which requires a different approach for debt collections. But, the biggest difference is the legal requirements imposed on consumer collections, which we in the industry refer to as “retail collections.” When collecting against businesses, we call it “commercial collections.”

Retail Collections – Collecting From Consumers

The Fair Debt Collections Practices Act (FDCPA) creates strict guidelines on how retail collections are performed and what can be said by debt collectors. Any reputable collection agency carefully adheres to these laws, and for mid-size and large agencies it necessitates that debt collectors read scripts so that they do not say something in violation of the law. There can still be a dramatic difference in the success rate among script-reading debt collectors. But, smaller collection agencies that have highly trained and experienced collectors knowledgeable in the FDCPA can often be even more effective as they can tailor their debt collections approach for the specific situation because they don’t need to read scripts to stay in compliance.

Commercial Collections

The FDCPA does not apply to commercial collections. As a result, the commercial debt collector can take a completely custom approach to each claim. The skills required for an outstanding commercial debt collector are dramatically different from a script reading retail collector. It is very difficult for a retail collector to also be a good commercial collector at the same time. Our multi-decade experience tells us that very few people who start off as a retail collector can successfully adapt to becoming a very good commercial debt collector.

If you need both retail and commercial collections assistance, there definitely are advantages to being able to use one agency that does both. However, if your commercial collections claims are significantly larger than your consumer claims, finding the best agency for the commercial claims is more important. It is better to use two agencies and maximize the debt collections than to use only one out of convenience but not recover as much money.

Most Commercial Collection Agencies do not specialize in any particular industry or type of claim. Typically the experience and approach of the debt collectors is more important than having focus on a specific type of claim.


By now you should know:

The Kaplan Group is:
• Small Agency
• Commercial Collections (B2B) only
• Large Claim Specialists
• Outstanding Success Rate

Next: Collection Agency Success Rates

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