Thursday, September 24, 2009

Collection Agencies

Using Collection Agencies

Many companies have to deal with non-paying clients and clients who do not make account payments within the agreed upon time period. Using collection agencies is an effective method for companies to recover debts, and a debt collection agency which can contact debtors face-to-face will be able to apply the necessary amount of pressure in order to impress upon debtors the urgency with which payment is required. Collections are a worthwhile precursor to a lawsuit, as they may often prove successful, negating the need for expensive lawsuits.

How Collection Agencies Operate

There are various laws regarding debt collection and fair debt collection practices, and a company which is professional will operate within the bounds of these laws. Collection agencies contact debtors via telephone, in writing and face-to-face – a combination of these measures often proves successful in eliciting payment. The majority of respected collection agencies use a contingency system for payment, whereby a set percentage is deducted from successful collections for the agency’s fee.