Industry experts InsideARM ran an interesting article this week entitled “The 5 E’s: A Creditor’s Guide to Managing Outside Collection Agencies“, which offered some great advice on hiring, retaining, and getting the most out of a collection agency. It covers some vital elements of a successful relationship, including compliance with federal and state laws, establishing security protocols to protect your customers’ personal data, and keeping your collection agency “honest” with both you and your customers.
1. Encourage Competition. Be sure you’re employing more than one outside agency to work your business. Compare the results of one agency against the others at regular intervals, awarding increases or decreases in market share based on the competitive results. Let your agencies know how each other is doing often. Tangible rewards in the form of increased opportunities motivate collection agencies, and competition with other agencies can bring out the best in them.
2. Ensure Compliance. Work with your outside agencies to develop a compliance program based on rigorous FDCPA training and regular phone monitors. Require that the agency test their people periodically in the federal and state laws that affect collection activity on your receivables. Then create a “phone monitor scorecar” that outlines exactly what you’re looking for in a call, and use this to score the calls you monitor. By knowing what steps the agency takes to teach their people the dos and don’ts, and by scoring actual calls, you’ll keep your outside agency on the straight and narrow and your reputation among consumers intact.
For the remaining 3 E’s, please read the full article at InsideARM!