Using a Debt Collection Agency

A debt collection agency, also commonly known as a collection agency, will pursue businesses and individuals who owe you money. They work for lenders or creditors and will look to recover monies owed usually for a fee representing a percentage of the money owed. There are a number of debt collecting agencies in the UK performing a variety of roles associated with recovering your money. A debt collecting agency will be able to advise you of your rights as a legal lender and most have a lot of experience in getting your money back in the most effective efficient way possible. Each country however, has it owns laws regarding debt collection agencies. Moreover, not every debt collection agency in the UK may be right for your business. Here are a few things to do before selecting a debt collection agency: • Do a little Research Various debt collection agencies specialise only in certain areas, therefore, go online and find out the what sort of agency you would want to handle your particular task and what sort of business it serves. • Verify the Legitimacy of the Debt Collection agency The UK has rules and regulations for debt collection agencies so make sure the agency you chose is licensed, bonded and adheres to all the rules of the fair collection of debts. • Make sure the agency provides insurance No matter how much research you may have done. There is always a possibility that the agency at some point has acted in bad faith. Therefore, get proof of insurance form your debt collection agency. Keep in mind once you hire a debt collecting agency, you will not be receiving the total amount that you are owed, which is way it is advisable to exhaust all other options before hiring an agency and making your own demands on your debtors. There are many benefits in using a debt collection agency. They usually operate independently. The creditor usually pays the debt collector 25% to 45% of the amount collected. Debt collection agencies collect debts of all types: medical, credit card, personal loans, business, student loans an even cell phone bills and unpaid utilities. Debt Collectors contact the borrowers using by telephone and letter trying to convince them to repay what they owe you. Collectors often report debts to credit bureaus as a way of encouraging the debtor to pay, as bad debts can do serious damage to the credit score of the consumer. Debt collection is an authorised and legitimate business and if any debt collector or agency contacts you, it is not always the beginning of an abusive and aggressive relationship. Many of the collectors are just honest people doing their jobs well who will set up a fair and honest plan to help you collect or repay your debt, whether it includes paying in instalments or all at once.