- November 30, 2020
- Posted by: Taurus Collections
- Category: Blog
When we decided to write an article about debt collection agency fees, we had to think about it carefully. After all, most agencies are similar in pricing and service, you would expect. The act of instructing an agency to collect your debt is a simple process and should be an uncomplicated job to undertake. However all isn’t always what it seems when using a debt collector to collect your debts.
Whereas out motto is to prioritise No Win No Fee debt collection, and achieve where possible, a no-cost situation for the client. This approach for many is not a standard approach. Debt collection agency fees can fluctuate, and many new clients we service have had poor experiences in the past. One recent new client paid an agency £3,000 upfront before acting on a debt collection matter, and to achieve no return whatsoever!
Debt collection agency fees
We have always built our relationships on trust, and debt collection agency fees should always be conditional on success. That way a debt recovery agency can offer a no risk proposition for your business, which is a win-win for everyone involved.
Most times costs & interest can be added onto the debt. This gives customers peace of mind knowing that debtors cannot just get away with non-payment.
The situation is getting worse for many companies in the UK. Currently there is an eye-watering £23.4 billion owed to small businesses in the UK, and the COVID-19 pandemic has exasperated that.
So we have put together a brief list of things to look out for when choosing a debt collector for business:
Skills & knowledge:
does your debt collection agency have experience collecting debts. We know this is obvious. But when you speak to them on the telephone make sure they understand your business, and how the debt arose. This can often be the key to success when collecting a debt because they know how to communicate with the debtor, and what escalation process would be most effective thereafter.
Realistic fees :
do not pay anything upfront! Typical fees for a debt recovery agency would be in the region of 10-15%. Anything higher than this, unless the debt is very old, you should look elsewhere. Performance should be judged by payment. If the debt is not collected then the agency has failed in its promise to carry out the work effectively. We are strong believers in paying for what you get.
Processes and escalation options:
make sure you find out what the debt collector process is. It is important that they have a structured way of operating and a reporting system. They need to keep you updated on the case at least every 30 days. How many letters will they send? Do they email as well as letters in the post? Do they call or send SMS chasers? And what happens when they can’t collect. You need to know how far down the road your chosen debt collection agency can take it. That way there can be no nasty suprise fees down the track.
Consider these tips when looking for a debt collection agency for your business
So that is our short list of things you should look out for when considering debt collection agency fees. You need to look at the whole picture, and choose carefully. The role of a collector is an important one for your business. You need to be sure they are competitive, as well as being the right match for you. You need to understand how they work, and make sure you are getting the right service and paying for it fairly.
If you would like to speak to a professional debt collector, look no further. We are experts at collecting overdue accounts for your business. Please don’t hesitate to call us 01332 565 350 or email email@example.com