What Are the Signs of an Ethical and Effective Debt Collection Firm?

Debt Collection Firm
Credit: Sora Shimazaki via Pexels

Your company is not alone if it’s looking for an ethical debt collection firm. As the novel coronavirus results in economic uncertainty, more organizations turn to debt collection agencies after exhausting in-house collection resources. 

However, organizations aren’t interested in just about any type of agency. They’re looking for ethical debt collection agencies. They want to collect their revenue to remain operational, but they also don’t want to harass delinquent customers when they may already be under financial strain. 

Unfortunately, finding a trustworthy and effective debt collection company isn’t an easy task. Although the days of collectors beating or threatening debtors with violence are mostly over, some agencies still use some of the following tactics to pressure customers:

  • Robocalls at all hours of the day including the middle of the night.
  • Lies about the nature, size, or term of the debt.
  • Embarrassing phone calls to a debtor’s friends, family, or employer.
  • Threatening visits to the debtor’s home or place of work. 

Some agents go as far as to misrepresent themselves as officers of the court. Here are a few reasons why these tactics are a bad idea:

  • They’re illegal. Unethical tactics can result in heavy fines and bans from the Federal Trade Commission (F.T.C.). 
  • They’re bad for karma.
  • They can adversely impact the creditor’s reputation.
  • Shady tactics are usually counterproductive. Most debtors don’t respond kindly to negativity. 
  • Debt collection associations frown upon these tactics and may disqualify such unethical members.

Your best bet is to partner with an ethical collection agency like Summit A*R that prides itself on its “P.H.D. Philosophy” (Preserve Human Dignity) policy. This debt collection agency claims to take a diplomatic approach to debt collection by treating all types of debtors with dignity and respect. Apparently, their ethical approach works because they boast twice the national average recovery rate.

Let’s look at some signs of an ethical debt collection agency:

1. No Shady Tactics

They refuse to use underhanded tactics, including threats, harassment and robocalls. Instead, they negotiate with the debtor and use their experience to convince late-paying customers to clear their dues.

2. Strong Reputation 

An upright debt collection agency should have a strong reputation. Look for testimonials on their website from creditors and debtors alike about how they treat people. Additionally, see if they have a good review from the Better Business Bureau. An honourable debt collection will probably also be affiliated with renowned collector groups that promote ethical values in the industry. 

3. Powerful Tools

A moral debt collection agency doesn’t have to use illegal tactics to recover revenue because it has plenty of formidable tolls on the right side of the law. For example, licensed collectors can report a delinquent account to the major credit bureaus. 

They can also use a skip tracking team to locate a debtor who has skipped town or crossed state lines. And particularly challenging debt, they can also draw on their legal resources to pursue the collection in court. 

There are many benefits to finding an ethical and effective debt collection agency to recover your business’s revenue. Please steer clear of shady agencies, or your company may face long-term ramifications.

Read Also : Problem Collecting Debt For Your Small Business