A lot of debt collection agencies use a softer, consultative approach to recovery, often to great success. That strategy was on display in the media this week as several large ARM firms were highlighted for their nice but productive collection techniques.

Monday, insideARM published an interview with Access Receivables President Tom Gillespie. Access had recently made available quantifiable statistics on a recent program implemented late last year called “Nice People Collect More.”

Access has seen its payment rate go up more than 40 percent since changing its collection strategy, with no complaints from consumers. The article was very popular, even getting picked up by The Huffington Post, and referenced by at least a dozen other online publications.

But that wasn’t the only story on nice collections in the week. Also on Monday, The Sarasota Herald-Tribune ran a piece on ARM leader Harvey Vengroff, founder of Vengroff, Williams & Associates (now VWA Capgemini after a 2011 merger). Titled, “Debt collecting with a heart,” the article focuses on Vengroff’s recent investment in a small debt mediation firm run by Alex Nathan that is helping Florida residents stay in their homes and pay down their debt using a friendly and consultative approach with consumers.

Like with Access Receivables, Vengroff quantifies the bottom line impact this approach can have on a firm. The story notes that “if someone owes $100,000 in credit card bills, Nathan and Vengroff can earn as much as $10,000 over a two-year period by reducing that person’s total debt to as little as $15,000.”

The “nice guy” news wasn’t limited to the United States. One of Australia’s largest ARM firms, Collection House, was featured in Australia Business Review for their friendly approach to debt collecting in Oz. The company’s CEO, Matthew Thomas, noted that he is actively trying to change the perception of debt collection in his country.

“I’m always trying to get people to take that extra 30 seconds to listen to what we do and not judge us based on the taboo,” Thomas said. “We provide so many more services and have a completely different methodology and approach in the way we think about our customers.”

If anyone was wondering how insideARM.com’s mission statement — to shift the public conversation about the ARM industry – works, the examples above should provide a start. The only way people can learn the truth about what collectors do is to tell them. We try to do our part, but it takes the effort of an entire industry to get that word out.

And believe it or not, the press will actually run stories like this.

 
In the fourth quarter of 2011, Access Receivables, a Baltimore-based debt collection agency, implemented a new debt recovery strategy under the slogan “Nice People Collect More.” Last week, the company released the findings from its first five months of operating under the process, measured between November 1, 2011 and March 31, 2012. From among those results, Access Receivables has shown an overall increase in payments for the measured period of 40.1%; an increase in educational debt recoveries of 70.1%, a substantial drop in the number of accounts entering a litigation stream, and zero complaints relating to the new program.

Following the public announcement about this data, Tom Gillespie, president of Access Receivables, granted an exclusive interview with insideARM.com to dig a little deeper into the company’s success with a debt collection philosophy that defies conventional stereotypes about the accounts receivable management industry and challenges mainstream media depictions of the debt collection process as adversarial to consumers. In short, I sat down with Mr. Gillespie to get the skinny on this departure from what has been perceived as traditional debt collection practices.

Access Receivables’ recent press release mentioned a new employee “awards program” tied to customer service metrics. Explain a little more about how that program works, and how it differs from traditional collection representative incentive programs.

We have a program we call Circle of Champions. There are basically three parts—three criteria—associated with the award. One is production. The second is passing several certifications and training. And when I say passing, they have to get a “B” [grade] or higher in their certification testing. I’m pleased to say that our overall score after retraining all of our employees with this new model was over 90% [“A-” or better]. And the test is very hard; I wrote it myself. The third part is that the representative has to get at least one debtor testimonial letter or verified debtor communication. And that’s one of the keys to our new approach. If we’re doing the right things, the debtor is going to be so appreciative of what we’ve done that he or she is going to send us a letter or an email saying, hey—I really thank you for helping me understand my credit and helping me do better at managing my finances. Those three components are the required building blocks of our new awards program.

Does this only function at the front line collector level?

Actually, our managers and supervisors have also had to undergo a separate certification to become certified credit counselors in addition to normal certifications required to be a debt collector. Let me be clear—we are not a credit counseling company. We don’t charge for that as a service. But as a part of our collection counseling with consumers—which is really what we do now—we want to be sure that our people are all thoroughly trained in all aspects of credit counseling as well as collections.

So is the program working? Are your collection representatives actually getting positive testimonial responses from the consumers they assist?

Yes. In fact, they’re posted on our website when we receive one. [See “What Our Debtors Think” on the Access Receivables site.]

You’ve also established a “virtual collector” interface on your website. Can you explain how that technology works?

We combined our efforts with a company called InterProse, a vendor of ours since 1999. In 2008 we came up with a patent-pending idea for an avatar-based virtual collector that takes a debtor through the steps of collection and the debtor does not have to call us or ever talk to a collector. In fact, we send out a statement stuffer with our letters that says, “Collections doesn’t have to be stressful. You don’t have to talk to a collector.” So if a debtor doesn’t want to talk to a collector—because they’re embarrassed… or for any reason—they can go to the site and self-resolve through the virtual collector. In addition, in the right column on http://2mybill.com/ we’ve developed a new program for online chat. I don’t know if anyone else in the ARM industry is doing this right now, but consumers are doing it all day long. The average person in America participates in something like 3,500 “chats” per month. And our platform translates in 17 languages right now, which has really helped us in the student loan area because a lot of our student debtors are international. Look, no matter which ARM company you are, it’s hard to find a collector who speaks Mandarin Chinese. But this portal allows the borrower to type in Chinese, the collection representative receives the chat in English, then he or she types back in English, and the borrower receives the response in Chinese. It’s very cool. On the first day we put the software in place we had three accounts resolved over online chat.

Have you discovered any other benefits of using consumer-friendly technology in your collection efforts?

In fact, yes. This work isn’t all about account resolutions; it’s about communicating. Sometimes consumers don’t in fact owe the debt. And that’s important communication too. Our job is not just to collect money. It’s to resolve balances for our clients. Sometimes our clients have erroneous debt because there was a billing error or a misapplied payment. And that’s just as important to figure out. One of the things we try to educate consumers and businesspeople about is that if they don’t communicate—and they ignore attempts to contact them—eventually it gets reported to the credit bureaus. And that’s bad, especially if a mistake has been made.

You’ve also launched a website for consumer financial education called Why Credit Matters. What’s its function?

This site is one of the fundamental elements of our overall approach to debt collection. Look, the debtor is not the bad guy. This is an educational website that has nothing on it that says, pay your bill. Instead it contains a bunch of information on debt settlement, bankruptcy, business credit, consumer credit, credit scores, etc. In fact, we even provide links to the Federal government—to the FTC—if they feel they’ve been abused by a collection agency. Consumers can use this site to understand a host of things about how the credit model has changed since 2008 and what that, for example, means about financial success in today’s economy.

How has that credit model changed?

If you’re between the ages of 18-45, you never in your life had to even worry about a credit score until 2009. It really wasn’t important for you. When you were in college and you had no job prospects, you were probably sent solicitations to for $20,000.00 lines of revolving credit. Older guys, guys like me, grew up understanding that if you didn’t have a good credit score, you couldn’t get credit. But there’s a giant generation of people from 18-45 who are really struggling now because all of a sudden somebody changed the game in the middle of it—and they don’t understand why or how. So we’re trying to educate them on the fact that now, if your credit score is bad, you’re not going to get that new refrigerator—at any price. Prior to 2009 it was all about, “What’s my payment? Ok, you’re charging me 25% interest. Fine. What’s my monthly payment?”—whether it was a car or a house or anything. Now the game has changed: you can’t get the car, you can’t get the house, and you can’t get the fridge. And consumers are very frustrated. But once they understand that the game has changed, they can then take responsibility.

That word carries a lot of weight. What does “responsibility” mean to you in this context?

Responsibility is a key word. To me it means people being able to take responsibility for their own financial future. And once people see that they can take responsibility for their own future, more often than not they want to pay their debts. Just saying “I don’t care; report me to the credit bureau” isn’t productive. We try to educate consumers to understand that not caring only damages their future credit prospects. It’s nothing personal with me. You’re actually harming yourself.

Access Receivables, an accounts receivable collection agency focused on first and third party collections for educational, insurance, telecom and commercial debt, has selected SunGard’s AvantGard Predictive Metrics for statistical scoring. The solution will help Access Receivables efficiently prioritize bad debt collections in order to help achieve higher rates of debt recovery for their clients and increase liquidations and cost efficiencies.

Access Receivables will leverage the predictive power of placement data to determine not only the propensity of accounts to pay, but also the expected dollar amount in order to help increase their liquidations and gain more accurate payment forecasting. AvantGard Predictive Metrics will help the company enhance their debt collections programs for their clients by helping them more accurately prioritize accounts and identify the type of collection strategy to apply.

Tom Gillespie, president Access Receivables, said, “Access Receivables prides itself on introducing innovative solutions like statistical modeling into its collections programs. A determining factor in our selection of SunGard’s AvantGard Predictive Metrics was the complimentary validation analysis performed on one of our most successful portfolios. The analysis demonstrated strong segmented results, thereby proving that they work and are accurate. Statistical modeling will help us reduce our dependency on credit bureau data and instead use debtor payment behavior data to help provide our clients with the highest rate of debt recovery.”

Dwayne Banasiak, vice president business development, Predictive Metrics solutions, at SunGard’s AvantGard business unit, said, “Collection agencies like Access Receivables are under increased pressure to deliver high rates of liquidations to their clients. Persistent economic volatility and high unemployment rates only add to the complexities of an already challenged industry. As such, knowing the probability that an account will pay, and the expected value, and then tailoring collections activity around this decisioning solution is a must. SunGard’s AvantGard Predictive Metrics provides statistical scoring for the collection of debt, automating the decisions necessary for evaluating the collectability of a portfolio, and thereby helping drive higher rates of debt recovery and increased liquidations.”

About Access Receivables
Access Receivables designs, implements and manages receivables management programs for insurance, telecommunications, educational and Fortune 500 companies. They are regarded as an innovator in the industry and have developed a unique approach to collections called “Nice People Collect More”. This scoring data helps access in its approach to offer fair repayment programs based on the debtors ability to pay. For more information, visit http://www.access-receivables.com.

About SunGard’s AvantGard
SunGard’s AvantGard is a leading liquidity and risk management solution for corporations, insurance companies and the public sector. The AvantGard solution suite includes credit risk modeling, collections management, treasury risk analysis, cash management, payments system integration, and payments execution delivered directly to corporations or via banking partners. AvantGard solutions help consolidate data from multiple in-house systems, drive workflow and provide connectivity to a broad range of trading partners including banks, SWIFT, credit data providers, FX platforms, money markets, and market data. The technology is supported by a full range of services, including managed cloud services, treasury operations management, SWIFT administration, managed bank connectivity, bank on-boarding, and vendor enrollment, and is delivered by a team of domain experts. For more information, visit http://www.sungard.com/avantgard.

About SunGard
SunGard is one of the world’s leading software and technology services companies. SunGard has more than 17,000 employees and serves approximately 25,000 customers in more than 70 countries. SunGard provides software and processing solutions for financial services, education and the public sector. SunGard also provides disaster recovery services, managed IT services, information availability consulting services and business continuity management software. With annual revenue of about $4.5 billion, SunGard is the largest privately held software and services company and was ranked 434 on the Fortune 500 in 2011. Look for us wherever the mission is critical. For more information, please visit http://www.sungard.com.

Trademark Information: SunGard, the SunGard logo and AvantGard are trademarks or registered trademarks of SunGard Data Systems Inc. or its subsidiaries in the U.S. and other countries. All other trade names are trademarks or registered trademarks of their respective holders.

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Have you given any thought to setting realistic goals for your collection agency?  Only about ten percent of the creditors I have worked with over the years, set agency goals.  I have worked with hundreds of creditors large and small over 30 years.  Sometimes, a client wants a collection goal but everything seems to be a secret. “Beat the other guy and don’t get me in trouble” is not necessarily the best plan of attack. This article will give you some suggestions on ways in which you can set recovery goals and return more dollars to the bottom line in the process. Increasing collections is one of the best ways to increase your company’s bottom line.  Every agency should know the answer to a few questions and they should sign a confidentiality in advance. This also helps you to get the best possible pricing.

• How many dollars you expect to place monthly by division, product or total – (What’s my opportunity?)
• Average balance per account, by segment of business-  (How much effort can I afford to put forth on an account?)
• Historic recovery rates of your best performers – (What is my initial goal to exceed?)

Summary

There are some great companies in the collection business and you only want great companies representing you. There are a few things you can do now to obtain the highest possible return without complaints this year:

1. Have a conference call with your agencies and ask them for an “annual percentage goal” for this year based on some expected placement amount and track to that goal.

2. Give them some sort of bonus at the end of the period if they hit that goal. If they consistently miss your target and are low performers, reduce placements or move on.

3. Give them a goal for lower complaints and review complaints received including listening to the debtor phone calls, if available.

4. Seed you placements periodically with a few “bogus” accounts at varying dollar values quarterly to make sure letters go out on time and phone calls are being made. Have the contact info going back to someone on your staff who can track the activity in a spreadsheet.

5. Pay off a small account periodically to make sure the money is remitted properly and on time.

6. One way a dishonest agency will work the numbers is billing you for direct payments that never paid. Make sure you have a strong internal reconciliation process.

7. Encourage your agencies’ to provide you with feedback on your receivables and involve the collectors who handle your accounts. You can learn much from your agency about ways to improve internal procedures. I have often told clients that the best way to have quality control is to evaluate the customers who didn’t pay.

8. If your company has promotional items, send a few to the agency to distribute to their people. Get the agency collector on your team.

9. Run an agency contest periodically during tough months. 10. Establish a champion-challenger program where you continually allocate business based on results.

10. Share information with your agency.  Explain your vision and allow them to be a partner to your organization.  Ask for their thoughts on new ideas and methods for success.

These are a few suggestions that might help to drive more dollars to your bottom line this year.

2012 marks DiversityBusiness.com’s 12th annual listing of Maryland’s top diversity business leaders. Chosen organizations exhibit the strength and financial viability to positively impact their communities. The winners have become sought after resources for corporations, government agencies and educational institutions who desire to increase opportunities with
privately-held businesses.

“We have a great future ahead of us, especially as entrepreneurs continue to reinvent products and services that transform the way we live,” says Kenton Clarke, CEO of Computer Consulting Associates International, the company which founded DiversityBusiness.com. Our nation’s business leaders are relentless. It isn’t a mere coincidence to see our competitive spirit still alive and persevere under these circumstances.”
Debbie Gillespie, Access CEO stated: “2012 marks the 7th time Access has been honored as one of Maryland’s Top businesses by diverisitybusiness.com. Our groundbreaking ‘Nice People Collect More’ business model, by its nature, requires a highly diverse, outgoing and committed workforce who know how to relate to and work with our debtor customers. Their outstanding performance is why we are more successful than firms that use traditional collection methods.”

The List
This List is a classification that represents the top privately-held businesses in the U.S., in sectors such as technology, manufacturing, food service and professional services. Large organizational buyers throughout the country who do business with multicultural, small and women-owned businesses use the list. The List is produced annually by DiversityBusiness.com, the nation’s leading multicultural social media website that links large organizational buyers to multicultural product and service suppliers.

Tom Gillespie, Access President added, “Large companies seek out services that complement their corporate ethics and standards for excellence. After twelve years in business and more than 400 clients, we feel we are well positioned to serve our key markets including education, telecommunications, insurance, technology and major corporations.”
For the complete list of winning companies, please visit: http://www.diversitybusiness.com

About Access Receivables
Access Receivables was established in 1999 by industry veterans Debra and Tom Gillespie. They were determined to build a new kind of collections agency that utilized evolving technologies and strong people skills to maximize returns while creating an agent/debtor relationship that would redefine the industry.

More than 400 clients located across the United States
Complete in-house operations – no overseas or contracted agents
MBE Certified as a minority-owned business
Millions of accounts served
Over one billion dollars placed.
First collection agency to provide online customer access
2mybill.com first ever debtor payment website
First AVATAR based Virtual Collector
One of 14 firms in the U.S. to be designated as a Certified Commercial Collection Agency out of 2200 by the International Commercial Collection Association (IACC).

The PEW research center recently reported that seventy-three percent of cell phone owners text one another, and send or receive an average of 41.5 messages on a typical day. This comes to approximately three messages every waking hour. Not surprisingly, young people are the most voracious test messages. Cell owners between the ages of 18 and 24 exchange an average of 109.5 messages on a normal day — or about seven each waking hour. The text rate messaging statistics internationally are even higher. Interestingly, the less education and lower the income level of respondents, the more they were likely to text. For example, respondents with less than a high school education reported an average of 70 texts a day, versus 24 a day for those with four years or more of college. The survey authors did not offer an explanation for this disparity. The Pew Research Center also asked in a survey how people prefer to be contacted on their cell phone and 31% said they preferred texts to talking on the phone, while 53% said they preferred a voice call to a text message. Another 14% said the contact method they prefer depends on the situation.

FACT: Texting and online chat is increasingly preferred among a rapidly growing segment of consumers and business owners. This preference may be so significant in those segments that other traditional forms of communication are no longer a factor. Land lines are quickly becoming a thing of the past. As consumers migrate online to manage their business transactions and decisions, the influence of chat on the customer experience will continue to increase. The Pew report states that one-fifth of both Gen Y (ages 18-27) and Gen X (ages 28-40) consumers located and engaged in online chat when they visited a company’s website.

Over the last few years, Access has been a leader in developing a greater connectivity for delinquent customers via the web. When we started our company in 1999, our payment site (2mybill.com) received only minor traffic. In 2008, we introduced a virtual collector on the web. Our virtual collector has been very successful in helping customers to self- resolve their account. The online chat feature just introduced this month is quickly becoming a great addition to our communication methods. In the first day, it was introduced, we had several people connect with us and pay their bill or make arrangements. At least one of those individuals was a foreign debtor that was able to communicate back and forth with our representative in their language and make an arrangement to resolve a $3,000 account. Oh yeah, I forgot to mention that our online chat product allows us to communicate with debtors all over the world in their language, sweet.

Successful collections is all about successful communication. On-line chat is another great channel to add to your arsenal for collections and customer service. It’s a highly cost-effective method of reaching out and making yourself more accessible to your customer.

What’s in a Name?   

One of the problems for creditors over the years was that some dishonest business owners would simply open a new bank account and start a new company periodically and let the old company die a slow death.  The subtle name change was transparent to their customers, but to creditors it was a problem. They would put the new company in their wife’s name, child’s name or worse.  Since credit for businesses and consumers was widely available, it was easier to get credit within 30 days opening a new bank account. Personal guarantees and social security numbers were not required by the creditor and were not always required as a condition of obtaining credit. In the last few years, this practice is changing rapidly as savvy lenders view small businesses more like consumers. Without credit and business credit cards, small businesses cannot survive.    

View a Small Business Customer Like a Consumer

Studies over recent years have shown the following:

Small business online purchasing and payment behavior mirrors consumer behavior. On many levels, the online payment preferences of small businesses are very similar to that of consumers. Preferences begin to diverge as the small businesses annual revenue grows or as the years the small business has been in operation increase.

• Credit is an important feature of any payment method. Not surprisingly, for a majority of small businesses, corporate cards and other payment instruments tied to credit are the payment devices of choice. But there is also a growing interest by Small businesses in alternative products tied to checking products.

Litigation is Expensive and Less Productive

Traditionally, commercial collections was pretty cut and dry.  If the debtor refused to pay, and the balance warranted suit, the client and the agency would agree to litigate the account.  This was a “win” for the debtor because often, it bought the debtor a year or more before needing to discuss the debt and they could continue business as usual. To make matters worse, the debtor would either enter a long-term payment plan after being sued or settle the debt for a much lower amount on the courthouse steps.  Clients felt compelled to sue quickly to “protect” their place but if the debtor closed his doors (on paper) and reopened under another name, the process would start all over again.

Why Credit Matters

We have taken a different approach at Access.  When the debtor says “Sue Me”: or “I Don’t Care”, we simply tell them that it is our responsibility to report their debt to commercial credit bureaus within 90 days if there is no “valid” dispute and they are unwilling to resolve the debt in a reasonable period.  We also point them to a new website we have created, www.whycreditmatters.net.  We explain that in a post 2009 environment, their personal credit and their business credit are almost one in the same.  Also, we give them the facts that their credit report is being viewed at least 100 times per year by all of their creditors for behavioral scoring and credit scoring purposes.  This approach is less adversarial than the legal approach which the debtor expects and in some cases prefers.  The result of our less adversarial and educational approach has been greater coöperation, admission of a problem, better open communication and higher resolutions. In 2012, a less adversarial approach coupled with real credit education is the right way to resolve a higher percentage of accounts over a shorter period with less cost. It’s simple, before a debtor will pay the bill, they must understand it is really in their best interest.  

To help remedy this situation, we launched WhyCreditMatters.net. It does not collect bills, but an educational website where debtors are referred as part of our collection process. In clear, simple language with easy-to-understand examples, it shows how not paying obligations can prevent debtors from establishing credit, buying vehicles, buying homes, renting an apartment and even getting a job.

This year, we did a total makeover of our company. We took a fresh look at our company with a blank page. Looking at a 12 year old company with fresh eyes is a daunting task because you have a tendency to hold on to the past. We did this because we feel that there is a fundamental shift in the way bills need to be collected in the future if agencies are going to be successful. ACCESS has traditionally been the top vendor for most of its clients because of our investment in high quality people, skip tracing, great training and simply hard work. That being said, we do not want to be the best vendor in an environment where the bar is lower for everyone. Our responsibility to our client rests in our continued improvement and innovation. So, as unsexy as it was, we reviewed every job description, workflow, trading program and procedure. In the end, a completely new company has emerged with a new theme, “Nice People Collect More”. It has taken countless hours on the part of everyone and especially my management team to identify how is more successful in a tough economy while also creating a solution for the debtor company or individual. We will be launching our new website in December and I hope you will take the opportunity to visit and give us your thoughts. Did I tell you I am grateful for the 400 clients who have entrusted us with their delinquent receivables and put their faith and trust in ACCESS every day? We will make every effort to be your best possible resource for third party recovery. Happy Thanksgiving.

Historical Prospective
Back in the early 1980’s, A major department store was faced with a problem. As a national creditor, they typically used large, national agencies. However, these agencies had other, larger, national clients including major banks and credit card companies that dwarfed them in size. they also had a lower average balance and was tougher paper. The key to success for large national creditors is to get their agencies’ best people working their files. Knowing this, the department store paid their agencies a 40% rate across the board. The going rate back then was 27-30%. The net result — they tended to get the best collectors, had lower agency turnover and consistently higher recoveries. Why? Because the agencies could afford to put more effort into every account, and coveted their business.

Analyze Your Business

If you want to receive the highest “Net Back” return, you first have to figure out how much your business is worth. Let’s use the following hypothetical example to analyze your business:

Average Balance = $1,500
Current Recovery Rate = 20%
Amount Collected Per Account = $300.00
Agency Fee Percent = 20%
Agency Unit Yield (FEE) = $60.00
Net Back to You = $240.00

In this scenario, the agency has a $60.00 unit yield, which means it has a good margin with which to give a high level of experienced collection work, along with in-depth skip tracing.
Your goal, in the end, is to get the best possible “net back” return. Ask potential and/or current agencies to give you a work plan and staffing proposal based on performance (i.e. they are paid a higher percentage if they return a higher percentage, but need to commit more resources to your file). Set your base recovery rate at the current 12-month return (in this case 20%).
Once your agencies know that you are willing to pay for quality, they will make every effort to impress and get you the highest possible recovery rate. At the end of the day if you pay the agencies 5% more and they return 5% more you will be the big winner.

In the scenario below, if the agency looks for a 40% gross margin, they can invest $56.00 on each account as opposed to $36.00 per account. In addition, you just increased your “net back” recoveries by over 17%.

Current Recoveries New Recoveries
Average Balance $1,500 $1,500
Recovery Rate 20% 25%
Amount Collected Per Account $300.00 $375.00
Agency Fee Percent 20% 25%
Agency Unit Yield (Fee) $60.00 $93.75
NET BACK TO YOU $240.00 $281.25

In final analysis, not all the technology in the world will get you the best possible return unless the person on the other end of the phone is a highly trained and effective collector.
Every agency has them. Why not make sure they are working your accounts.

One Final Warning:
If your agency is giving you a real cheap rate and you have no audit program in place, you are inviting trouble. In my earlier days, I was Vice-President of Marketing for FCA International. FCA was the world’s largest collection agency at the time with 120 branch offices in 5 countries. As part of my responsibilities, I was involved in 10 collection agency acquisitions during a five years. To my surprise, I had many experiences where we found out after acquiring a collection agency that the owner was siphoning off debtor payments and had 2 sets of books. In one case, the theft was so alarming, that we immediately terminated the former owner who had an employment agreement with our firm and reported our findings to the States Attorney General’s office. While the case was being investigated, FCA was under a gag order not to divulge any information to anyone including the effected clients that there was a misappropriation of funds. One day, I walked in to a branch office and thirty clients had sent letters of termination in one day because we fired the former owner. The comment I often got when visiting the clients was “If Joe (not his name) is no longer employed in your company, we have no interest in doing business with you. At the end of the investigation, we identified over $250,000 that was embezzled from almost every client across the board. Joe’s agency charged low rates in comparison to the market (go figure).

Most collection agencies have high standards of excellence and really want to give you the best possible return on your accounts. By designing a win-win collection program with your agency, you will receive the highest possible net back return over time. Also, seed your accounts periodically so you can audit the quality of the work that they do.