Collection agencies are becoming very competitive. Every type of business is struggling and keeping a close eye on their bottom line. The collection industry. like many, has its fair share of scammers, so be careful. When researching the services of a collection agency it is important to know they are licensed and bonded. Remember, they are responsible for handling your money. Check with the Attorney General’s Office and the Department of Licensing to be sure their license is current and verify the number of complaints filed against them. It’s great to save money on fees but the last thing a business needs is to be involved in a lawsuit created by a collection agency that did not follow the FDCPA (fair debt collection practices act.)

There are some collection agencies that state they will give you 100 percnt of your money, collections is free! The cost is added to the debtor! This is only true in the case where the cost is “expressly authorized” and that means by law not just any contract. Some of the few accounts that allow the cost of collection to be added are, commercial accounts with the correct signed contract, dishonored checks and government debts. Remember the old cliché, “if it sounds too good to be true, it probably is.” I have businesses constantly wanting to add the cost of collections to their accounts. They don’t want to lose a dime. Trust me, I totally understand their frustration of sharing their money with a collection agency and I totally agree the law should allow the cost to be added. But as we all know, the business friendly environment is not so friendly.

I always tell my clients to turn their accounts over when they have reached the point that something is better than nothing. More important than the fee the agency is going to charge, ask what their recovery rate is. If they charge little and collect nothing, there is no bargain.