Many business owners and creditors can be extremely hesitant to engage the professional services of a debt collection company to collect accounts that are not paid. They’re typically reluctant because they worry about maintaining the relationship with their clients and fear that bringing in the services of a debt collection agency could harm that relationship.
In the first place, they should think about whether the client is one they can trust if they are not paying them in time? But, if they can find a good debt collection agency and they are able to understand the relationship that you share with this particular client and alter their methods to meet the needs of. This means that debts can be successfully repaid and relationships are able to be maintained with the client if they would like to. If they don’t, then a stronger approach can be used by the debt collection agency to recover the money but there shouldn’t be the same method of collection in every situation. Choose the company you would like to use with care because there are plenty of rouges, fly by nights , and agencies that will scam you.
Types of Debt Collection Agencies in the UK
There are many Debt Collection Agencies in the UK Some of them are owned or run by large corporations, and some of these companies are based at the United States or somewhere else in Europe and have contact centers in other countries like the Philippines, India, Poland or elsewhere.
These big companies are focused on a high volume of accounts from a smaller percentage of customers, mostly high street banks as well as credit card companies and utility bills. These types of agencies are not able to handle a business unable to pass the large number of accounts to collect each month or year. The relationship between the debtor and creditor will not exist since the creditor will have already taken care of the debt and it will be in their best interest to lose this customer.
Other agencies for debt collection deal exclusively with debts they’ve purchased, they are called Debt Purchasers. They buy the debt from large organisations including high street banks or credit card companies. They also payday loan companies or utility companies. They will pay sometimes only 1 cent in pounds or perhaps a bit more for debt that they now be the owners of. They make their profits in the hope that they can earn more from the debtor than they were able to pay to settle the loan. The original creditor for the debt is likely to not be interested in maintaining any sort of connection with the debtor, as they do not wish to have to deal with them for anytime soon.
There are also specific debt collection London Agencies to help and support all sorts of diverse businesses. Some companies may operate in certain areas, such as the construction industry as well as Oil & Gas, others might cover all areas. These kinds of companies provide the most personal service to clients and also for the debtor. This is why they generally have a very high success rate due to the fact that they focus their attention on each case rather than dealing with an overwhelming number of cases. They tend to be smaller to medium-sized agencies and are able to personalise their services to meet your specific needs.
How to Choose a Suitable Credit Collection Agent?
If you are unsure of the agency you’d like to work with, you may ask the agency to supply references from some of its previous clients. We would suggest that you actually phone the customer yourself after you’ve received the reference from the agency, just to check whether it’s authentic.
The debt collection agency should be well established and should have been operating for some time.
Reputable, trustworthy and professional Debt Collection Agencies will work on A No Collection basis – No Fee. They will not charge any “upfront costs” or “registration fees” This is simply an effort to get money from you and a lot of agencies will take these charges and you might not hear back from them once more. We have heard of horror stories in the field of clients giving the debt collection company sometimes even PS2000.00 upfront to collect cases up to the value of PS10,000. If you know that a Debt Collection Agency has been in business for many years using a No Collection No Fee Basis, then you’ll see they’re skilled in their work as they do not earn any money unless they recover your money against the person who owes you.
It is recommended that you request the debt collection agencies Terms and Conditions before directing them to carry out the collection on your behalf or signing any papers. The company should have clearly outlined the rates they charge in their Terms & Conditions, and there must be no hidden charges.
The Financial Conduct Authority recently took over the regulation of Debt Collection industry in the UK from the Office of Fair Trading. You should never use an Debt Collection Agency who are not registered with The Financial Conduct Authority.
Each agency needs to obtain the proper “permissions” from The Financial Conduct Authority in order to be allowed to get debts. They’ll all be issued a registration number by The Financial Conduct Authority which is often found on their website or their stationery etc but you should request for the registration number and verify whether it’s authentic on the Financial Services Authority website.
Commercial Debt Collection Need More Advice?
If you carry out the simplest of tests, this will allow you to choose the correct debt collection service for you, that will have the best success rate and not charge you anything, or else you could end up paying more out of pocket than before.
For more information about our services please do get in touch.
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