Collection under a Microscope
October 09, 2014 at 5:36 PM
As a Collection Agency, we are currently under the scrutiny of state and federal laws. At last count there were over 100 laws. We are licensed by the Secretary of State in Nebraska, and we are overseen by at least three federal agencies.
Recently, AT&T and several collection agencies signed off on a $45 Million settlement in regards to their efforts to collect debts by using cell phones. AT&T alleged that they had permission in the initial sign-on agreement to contact consumers when they sold the cell phones. Unfortunately, based on the Telephone Consumer Protection Act, the courts didn't see that that way. Read article here
In July, the Consumer Financial Protection Bureau went after a law firm for operating “like a factory”, in order to collect debt. Too many times a collection agency will be quick to send an account to legal for judgment. Is this what you want from your agency? Your accounts receivable management "partner"? It directly affects your business. You will pay a higher commission rate and cause angst for the consumer (your customer).
There are collection agencies who measure their success in the number of lawsuits they process. At Professional Collection Services we measure our success in our collection rate and satisfaction of our client and the consumer that the debt was cleared.