How to select the Collection Agency that will work for you!

How to find a collection agency that will work for you? Here is the straight talk on collections and the realities that creditors need to face. There are 100’s of billions of dollars in debt being bought and sold on the debt market (credit cards, bank notes, fortune 500 companies, etc). Prices for this debt (referred to as “Paper”) can range from being a fraction of one penny all the way up to ten cents plus on the dollar. These debts (sold as portfolios) are bought by collection agencies nationwide.  In other words, it is possible to purchase $1,000,000 in debt for $10,000 (give or take – prices fluctuate based on the number of times the accounts have been bought and sold).

Collection agencies have employees who make commissions based on the “placement” rate of an account.  If a collection agency is offering to handle your account for a 30% or 40% commission, the employee might get 3% or 4% in commissions from your account (the less the collection agency is willing to take the smaller amount the collector gets). However, the debt portfolio purchased by the collection agency may have 90%+ profit (some up to 99%+ profit). Collectors can get 30% or more in commissions from these portfolios.

When an employee comes to work, their database (called a “Queue”) is populated with 100+ accounts. The employee, as mentioned above, makes their money based on commissions. It is in their best interest to run through their Queue as fast as possible (with letters or phone calls) in order to get new accounts placed into their Queue to work (pushing out the accounts they do not want). We refer to this technique as “Hit and Run” or “Drive-By” collections. If they can’t get the debtor to pay up, they prefer to GET WHAT THEY CAN!  Example:  “Mr. Debtor, I can settle this $1,000 account for $199.95 if you pay today!”. When you are dealing with a 90%+ profit margin you can cut deals like this. You, the creditor, normally does not want to “settle” on the account balance ($1,000 in my example). This inability to negotiate with debtors prevents collectors from performing their Hit and Run or Drive-By collections and therefore not generating quick commissions for the collector. YOUR ACCOUNT THEN BECOMES A BURDEN TO THE COLLECTOR!

The reality is that if there is no reply to a letter or no response from a telephone call (called a “Talk off”), the collector simply pushes the account out of his queue and waits for the next account to populate in. This way, the collector can go through as many accounts per day as possible (taking what he can get). Why do you think they use an automated phone dialer? If your account comes across the collector’s queue and the collector is going to get 3% or 4% vs. 30%+ for a portfolio account, which account do you think the collector will work? Which one would you work in his place?

Putting this in perspective, if you had fresh hot food waiting for you in your kitchen every time you went in there, would you go to your refrigerator for left overs? Of course you wouldn’t. Collectors belly up to the accounts buffet every day. They take the fresh food coming into the buffet and they push the old food aside to rot away.

Here is some more reality for you. After working a portfolio for a month or two and ‘sucking’ out as much money as possible, the agency will sell the portfolio to someone else and the cycle continues.

Do collection agencies (who work portfolios) want your business? Yes and No. No, because they can make more money working portfolios and Yes, because a small % of people will pay on accounts (like yours) with one call or a few letters. This gives the agency a cash flow that can be used to purchase more portfolios, make payroll, or just to boost their bottom line.

If you have a judgment, you may want to find a specialist in judgment enforcement. Judgment debtors do not (as a general rule) respond to letters or phone calls. Attorneys, unless they specialize in collections, do not like to enforce judgments on contingency (they like to get paid by the hour).

What to look for in a collection agency:

1)  Are they working purchased portfolios?

2)  Are they giving you too good a price? (The less they want the less attention your account will get - you get what you pay for)

3)  Will they take your account to court?

4)  Are they going to make you pay for the court costs?

5)  Can you have your account / judgment back after a reasonable amount of time? (Even if they paid to get the judgment - most will NEVER give back a judgment if they paid)

6)  Can you see the status of your accounts whenever you want?

7)  Do they advertise themselves as a "Call Center"? And brag about how many calls they can handle with their automatic phone dialer?

Our collectors only collect your accounts (accounts from people like you). Our collectors are paid commissions rates comparable to what others pay for the collection of portfolio accounts. This allows our collectors to spend more time and effort on your accounts and make more money. RecoveryPro Solutions has not, does not, and will not purchase debt on the debt market.

We also do not allow our collectors to return accounts just to refill their “queue”. We monitor our collector’s activities every day and review all accounts that they wish to return. They work their accounts that they have or they do not make any money!

RecoveryPro Solutions will take your account to judgment, pay associated fees, hire the attorney AND recover on your judgment *. In fact, judgment recovery is one of our specialty.

Using ClientWatch, accounts placed with RecoveryPro Solutions can be viewed LIVE over the internet! (for FREE) Who else does this?

Ultimately, the decision is up to you as to which collection agency you will hire. You can choose RecoveryPro Solutions which will give your accounts the attention that they (and you) deserve or you can choose one of those “big” guys who are running call centers with collectors putting commissions first.