Interesting Facts You May Not Have Known About the Debt Collection Industry
Categorised in: Our Blog
Debt collection services are used by many businesses across countless industries in the United States. They help businesses recover revenue that allows them to meet operational costs, grow, and pursue important business opportunities, which add to tax dollars and keep people employed.
As a debt collection agency with nearly 25 years of valuable experience, at Summit A*R we’ve noticed that many people share some common misconceptions, while others are unaware of the strengths of the industry. That’s why we’ve put this blog together about interesting facts you may not have known about the debt collection industry.
#1 There Are Ethical Debt Collection Agencies
At Summit A*R, we take an approach that we like to call our “P.H.D. Philosophy” (Preserve Human Dignity). This means that we treat debtors with humanity, dignity, and respect. This ensures that our clients are represented with professionalism and integrity. Our experts handle accounts with sensitivity and compassion, allowing our clients to recover revenue without alienating customers. Our ethical approach is evidenced by our coveted A+ rating from the Better Business Bureau (BBB) and positive reviews from clients and their debtors alike.
While some bad eggs use shady tactics, most agencies know that these approaches are counter-productive. It’s human nature to not cooperate with someone who is mistreating you. As the English say, the proof is in the pudding. Our recovery rate is twice the industry average because of our ethical approach.
#2 Debt Collection Agencies Are Regulated by Law
Debt collectors can’t simply go and do as they please. Anyone offering debt collection services is regulated by the Federal Trade Commission (FTC) and must follow the rules of the Fair Debt Collection Practices Act (FDCPA). By breaking these rules, they risk getting heavily fined or blacklisted. Moreover, they can get sued by debtors for a sizable amount.
#3 There Are More Debt Collection Agencies Than You Think
Most people don’t realize that there are thousands of debt collection agencies operating in the United States. According to IBISWorld, as of 2020, there are 7,060 Debt Collection Agencies in the country, while the southeast part of the United States has the most agencies.
#4 The Industry Has Many Reputable Associations
The debt collection industry has many reputable associations that inspire members to take an ethical approach and offer a wealth of resources.
- ACA International: Founded in 1939 and originally named the American Collection Association, this trade group represents members of the debt collection industry, including agencies, attorneys, creditors, debt buyers, to name a few. In total, this amounts to over 230,000 professionals. ACA International promotes values such as leadership, integrity, respect, responsibility, and education. It asks its members to debtors with individual worth, dignity, respect, and to help consumers find ways to pay their just debts in professionally and ethically. We’re happy to be affiliated with an organization that promotes values like our P.H.D. Philosophy.
- American Association of Health Administrative Management (AAHM): This non-profit organization isbased out of Fairfax, Virginia, and was founded in 1968. Its mission is to “provide education, certification, networking, and advocacy for healthcare revenue cycle professionals”. Through certifications, networking, publications, conferences and seminars, the AAHAM helps develop skills and knowledge for those associated with the health care industry. As members of AAHM, we have access to information that helps us serve the specific demands of our clients in certain communities and to pursue collections with a unique insight.
- Rural Health Alliance: This organization has come a long from its humble roots when it was founded in rural Minnesota in 1983 by four country hospitals. It started as a non-profit organization designed to address the new Medicare payment rules. Since then, it has grown exponentially, and today serves members in dozens of states by acting as a vehicle for ongoing communication, coordination, cooperation, integration, and unity of purpose for member health care entities. As an affiliate, we benefit from their values when pursuing debt in some industries.
- International Association of Commercial Collectors (IAACC): Like the ACA international, this is a positive membership group for the debt collection industry. It facilitates the growth of its members by sharing resources, programs, and promoting encouraging conduct, creating a healthy environment for collectors and clients. It also encourages ethics and professionalism in the debt collection industry by highlighting the positives of using the services of its certified member. We’re proud to be a member in good standing of an association that promotes ethics, education, leadership, and mutual support.
#5 Ethical Debt Collectors Have Tools Too
As an ethical debt collection agency, we don’t have to use shady tactics to recover debts because we have some powerful tools. When we’re given a new account, we start a session of demand letters and phone calls. Whether it is a consumer or commercial debt, people usually respond positively to this campaign and clear their dues.
This is because most people don’t want the situation to be escalated, especially when a reputable agency is involved. When communicating with customers we take a professional and friendly, but serious approach. Not are our collectors licensed, but they’re highly trained and experienced. Using their skilled negotiation skills, we can help the more stubborn customers find a way to pay what they owe.
Unlike an in-house collections department, we can also report consumers and companies to the three major credit bureaus. Neither entity wants their credit report to be affected by their debts. A negative credit report can affect anyone’s ability to borrow. Consumers are less likely to be approved for a mortgage, while a business can find it harder to be approved for a business loan if there are unpaid debts on their record.
For customers who skip town, we have an excellent skip tracing department led by a private investigator and supported by cutting edge technology. And for particularly difficult debts, we save our most powerful tool until all usual collection efforts have been exhausted. We can take legal action with the assistance of our financial investigator and our legal team. This option is only explored after written consent from our client.
These are five facts you may not have known about the debt collection agency. If you’re interested in using the services of a reputable, ethical, and capable agency like Summit A*R, then call an associate today to learn more about your options.