Heckler & Smith Associates, Inc.

~ Before you decide to hire a collection agency make sure to research the company. Obtain a Reliability Report from Business Consumer Alliance. Verify that the business is a legitimate company with active licensing bonds and insurance if applicable. Also make sure that the business adheres to the Federal  Fair Debt Collection Practices Act. Inquire about the businesses experience with your specific industry type age and amount of debt you are trying to recover as well as the success rate that the company has had with collecting past due debts. Ask for references of clients who have been successful with using the company’s services. Select a business that is easy to communicate with and provides a reliable point of contact. Make sure the contract has a clear description of the services to be performed cost of services and any other terms and conditions. Compare services and fees of several different companies before making a final decision. Some agencies work on contingency meaning they collect their fees on the back end once the debt has been collected. Typically these types of arrangements allow for the agency to charge between 25-45% of the total collected. Another option is to pay a flat fee which is usually a small fee paid up front. If you are considering paying a flat fee obtain any policies regarding refunds and guarantees in writing prior to making any payment.

~ The debt collector should be willing to provide reviewed or audited financials detailed information on the collection process including how the debtor will be contacted and how often and regular updates on their collection activity. Some agents will set up independent trust accounts for payments made from your customers so that they are separate from other funds. Inquire about the company’s use of “skip tracing’ which allows the agency access to several databases to help locate a debtor if they are no longer at the location on file and have left no forwarding address.  Ask if the agency has “Errors and Omissions Insurance” which can serve as a protection to you and your business if the collection efforts cause the debtor to file charges claiming negligence harassment or aggressive collection tactics. Keep in mind agencies normally will not provide a timeframe for recovering debts as this is dependent on when or if the debtor pays. Be leery of any claims that seem too good to be true. Finally realize that more than likely you will not recover all of the money that is owed so it is best to exhaust all other collection measures before contacting a debt collection agency or debt recovery firm.