Search Google for “collection agency” and you’ll bring up about 73 million web pages. Collections can be a crowded space, and confusing territory for business owners or Accounts Receivable Managers looking for help recovering debt.
In Canada, there are numerous regulations governing collection agencies, but oversight is limited. As a result, many common collection agency problems continue to perpetuate themselves. The best agencies tend to rise to the top, but it’s not unusual for others to muddy the waters.
How can you tell the great collection agencies from the less effective, or even less ethical ones? Here are 5 things to look for:
1) Customer Reviews
Perhaps the clearest indicator of which collection agencies consistently do great work for their clients is those clients themselves. An exceptional collection agency should have plenty of credible online reviews. Search the agency’s name, and check what people have posted to Google. Watch for patterns that indicate poor customer service or unethical business practices. You might disregard some negative reviews by debtors (who often simply dislike being sent to collections), but be mindful that the way an agency deals with your customers is very important. A common collection agency can be expected to have a small number of mixed reviews, whereas a truly great business will have predominantly favourable ones.
2) Years of Experience
In debt collection as in all financial services, experience is essential. Beware of popup agencies that have just recently arrived on the scene and can disappear just as quickly, leaving you in the lurch. Debt collection is highly specialized work that cannot be done effectively without experienced leadership and staff.
3) BBB Rating
For a collection agency, especially one that does any significant consumer volume, it is exceedingly difficult to sustain a strong rating with the Better Business Bureau. Issues and complaints (from debtors as well as clients) must be dealt with consistently, which is simply too much work for most common collection agencies. Very few even bother. That’s why I’m so proud of MetCredit‘s A+ rating with the BBB, one we’ve worked hard to maintain since 1974—the year after we were incorporated.
4) Physical Presence
Many business owners don’t realize they can simply pay a visit to prospective collection agencies and ask for a tour. I love to show people around any of our offices so they can see how we operate. Observe how organized and professional the collectors and other staff are, and how they protect confidential customer and debtor information.
5) In-House Legal Department
Taking a debtor to court should always be reserved as a final recourse, but if all other efforts fail you want your collection agency to have an in-house legal department. Debt litigation can quickly become costly, especially at common collection agencies with a practice of outsourcing legal collections to an outside law firm. At MetCredit we are staffed and equipped to process legal documentation speedily and manage the entire litigation process at the lowest possible cost.
For more advice on choosing a standout collection agency, use the link below to download my free Guide to Canadian Collection Agencies. Or contact MetCredit to get started now.