Starting a Collection Agency, what you need to know – Part 4

If you’re thinking about starting a collection agency you may have some debt collection experience.  You may already know the most effective ways to encourage people to pay their bills.  The most effective way to encourage someone to pay a bill begins with the creditor, or the business owner the customer is dealing with.  If they had to fill out paperwork and be credit approved before being allowed to walk out of the store without paying, they are a little more likely to pay their bill.  When I had my agency most creditors did not do this, so many of the accounts I was trying to collect on really didn’t think I was serious or the creditor was serious.  The most effective ways I have found to help collections move right along are:

  1. Collecting in person
  2. Collecting by phone
  3. Collection letters

I have to add that none of the above work without the most effective collection tool which is to  FOLLOW UP!

Starting a collection agency is something you can do part time in the beginning and then move on to full time as you build your business.  You will have to prove yourself by being a good collector to get clients and to get them to tell their friends about your agency.  There is a lot of competition out there but there always seems to be more debt that needs to be collected.  The biggest mistake people make when starting a collection agency is not having any knowledge about the industry and not having any experience.  To be a good bill collector you really need to know the FDCPA, have patience, stay in control of collection calls and end the call with a positive result. Education will be the key to your success.

Ultimate Credit and Collections Handbook

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One Response to Starting a Collection Agency, what you need to know – Part 4

  1. lewisgary604 says:

    What an excellent post. I agree with you, that some of the best proven ways to collect are:

    1) Collecting in person
    2) Collecting by phone
    3) Collection letters

    Question, how do you feel about third-party online credit card processing for collection agencies? I feel like this is a huge help in getting debt recovered more quickly and remitted to clients. Only if you can find a company that has low rates and a high approval rate. I like this one Any thoughts?

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