Collection FAQ
Below are a list of Frequently Asked Questions (FAQs):
01
Why use a collection agency?
Debtors will often pay a collection agency even though they never cooperated with the original creditor, mainly because collection agencies typically increase the psychological anxiety associated with a debt. Second, the debtor will understand that the creditor is serious about collecting their money. Also, many debtors are wary of the impact that a collection account can have on their credit score.
02
What are your overall collection success rates?
There are several variables that will influence recovery rates: the age of the debt is arguably the most important factor. The older the debt is, the lower the chance of recovery. Other important variables include: industry, balance, documentation, demographics and type of debt (commercial/consumer/medical/NSF checks, etc.).
03
How quickly will you collect my money?
Claims are entered within the first 24 hours and the first collection notice is mailed immediately thereafter. This notice is followed up with subsequent phone calls and additional letters. Some debts are collected in the first 2-3 days while others may take up to 2 or 3 years! There are skips (cannot locate debtor), debtors who dispute the debt and debtors who are simply uncooperative. On average, though, we collect most of our payments within the first 90 days.
04
Communication is very important to me. What type of reporting do you offer?
CELCO offers many different reports to our clients. We have a custom report module that can create many custom reports based on the needs of the client. Our most popular reporting package includes: MONTHLY debtor activity report, actuary report and a monthly payment report. Other packages are available and a CELCO Client Relations Representative will assist you in determining which package is the most appropriate for your company.
05
What if my debtor disputes the debt or simply refuses to pay?
If the debtor disputes the debt, CELCO will provide them with verification of the debt, which typically consists of the documentation initially provided by the client. On occasion and depending on the dispute, CELCO may have to request additional documentation from you, the client, in order to properly verify the debt. If the debtor simply refuses to pay, we will review the file to determine if litigation is advisable and upon client approval, we will forward the file to collection counsel. Relevant factors to consider prior to commencing litigation include: good documentation, balance, cost of litigation and a good address to serve the debtor with the lawsuit. If a file is not considered “suitworthy”, you may still request that we report the debt to the credit bureaus. We receive many payments each week from debtors trying to clean up their credit rating by paying off old debts.
06
Does CELCO handle my claims all the way through the collection process, including legal?
Yes. CELCO will attempt to recover your debt in-house. In the event litigation becomes necessary, CELCO has developed a national network of collection attorneys to whom we will forward your files upon your authorization. We will also keep you updated as to the progress made by the attorneys who are working on your behalf. Our clients appreciate the fact that we take care of everything throughout the collection process, especially the legal process since many people are not familiar with the complexities involved in a lawsuit.
07
How important is the age of a debt?
The age of a delinquent account is one of the biggest factors in determining whether or not a debt gets paid.The older the debt, the harder it is to collect.Research on the collectability of delinquent accounts clearly shows that the most advantageous time to enlist the services of a collection agency is within 60-90 days of the invoice due date. Incorporating this strategy will help ensure maximum recoveries with the least cost to your company.
08
My Company is very customer oriented. Can you collect without damaging goodwill or jeopardizing future relationships with our clients?
Yes, we can. At CELCO, we don't adopt a “cookie cutter” approach to collections. Many of our clients give us specific instructions as to how to proceed against their customers. We realize that today's slow-paying customer can often be converted into tomorrow's good-paying customer with the right amount of collection follow-up, which is why CELCO endeavors to collect while attempting to salvage the business relationship between our client and their customer.
09
What experience level does your staff of collectors possess?
Since CELCO is one of the few agencies that successfully handles both consumer and commercial claims, our collectors are both specialized and cross-trained in both types of collection arenas. All collectors are highly trained and knowledgeable in FDCPA requirements. Courses and seminars are offered that cover a wide spectrum of collection and service related issues. They are also required as a condition of further employment with CELCO.
10
What sets your firm apart from the many agencies out there?
Established in 1992, CELCO has seen significant growth over the years. During this period of development, we have learned what our customers require and have structured our company to provide them with exactly those needs. Performance and communication are two aspects that hold great importance for us since their successful accomplishment will translate into satisfied clients. Our new, enhanced website and full-time client-relations representatives are two of the many reasons that CELCO outdistances the competition when it comes to communication. At CELCO, our collectors do not stand alone, but rather are supported by all levels of management. We take collections very seriously and believe that collections are and should be our primary focus.
11
Does your company charge an annual fee?
Good news. There is no annual fee for our services. In fact, since our fees are generated solely upon collections, you don't pay unless we collect.
12
What information would you need from me in order to get started?
After obtaining your company's name, address, fax, phone and E-mail address, we would require the debtor's contact information; name, address, phone numbers, total amount owing and its due date. This information is sufficient for us to commence collection activity against your debtor. However, relative to collections, knowledge is power. The more information we possess concerning the obligation, the easier it is to dissolve objections and effect payment.
13
What is your process for collection?
Once a claim is forwarded to CELCO and booked for processing, first contact is initiated within 24 hours. Our efforts continue through a series of impact letters and timely phone contacts until the account is resolved by one of the following outcomes occurring: payment in full, payment arrangements made, settlement made, litigation necessary or efforts exhausted.