Commercial debt collection agencies can be tremendously effective partners for almost any small business that offers credit to their customers.
The right debt collection agency can act as your own personal accounts receivable department tasked with tracing down delinquent accounts, contacting debtors, negotiating payments, filing for judgments, and collecting payments.
To be perfectly honest, there is not much that a commercial debt collection agency can’t do to help improve your company’s cash flow. However, there are certain lines that a reputable collection agency should not cross.
Threaten or Intimidate Debtors
One of the biggest things that a commercial debt collection agency cannot do to help you is threaten or attempt to intimidate people they contact on your behalf.
You may find yourself wanting your third party collection agency to push the envelope on this front, but not only is this illegal, but it also reflects badly on the reputations of all parties involved, most notably, your company.
Attempt to Collect Time-Barred Debts
Commercial debt collection agencies are also going to be held to the same rules and regulations as anyone else when it comes to time-barred debts.
That means that anything that is too far gone for you to collect on your own is also going to be too far gone for a commercial debt collection agent to pursue.
Collect Debts That Aren’t Legitimate
Much like any other professional service your company partners with, commercial debt collectors are only able to work off of the information that you give them.
That means that they are not going to be able to create non-existent paperwork out of thin air. They will also be unable to pursue any debts that aren’t legitimate with solid documentation.
Attempt to Impersonate Law Enforcement
It might sound obvious that a commercial debt collector cannot impersonate a police officer, but it should also be noted that a third party debt collector also cannot attempt in any way to represent any type of government agency.
In many cases, leading a consumer to believe that a collector is connected to a government authority might make a collection attempt sound more serious, but that is strictly forbidden in any situation.
Violate Any Other Aspect of FDCPA
Commercial debt collection agents are also bound by the Fair Debt Collection Practices Act, which is almost entirely written to prevent collection agencies from using any type of predatory tactics in their collection efforts.
Where first-party debt collection tends to have some wiggle room in certain situations, commercial debt collection agents are always going to have to be highly cautious to follow the letter of the law in all situations.
Having a commercial debt collection agency as a partner can take a tremendous amount of work off of your plate, but there is no magic bullet when it comes to recovering outstanding or delinquent debts.
Make sure that your expectations heading into any partnership are reasonable, and always respect the fact that a reputable collection agent will not be willing to violate any rules or regulations regarding collections.
