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I own a collection agency. I avoid medical collections because they are difficult and frequently heart-breaking.
Consider this: for every placement we receive, someone took a good or service and did not pay for it. The merchant or vendor paid for the product to sell it. Now the customer won't pay. Not every debt warrants small claims court.
National recovery average for agencies is about 7.6% (we recover 22.6%). We do not harass debtors, we send standard letters, we do not report credit until after the customer has had the opportunity to dispute the debt as required by law, and once reported, we stringently follow the rules and report any and all payments timely. We contact the debtor by phone and are always courteous which is probably why our recovery is so high.
We treat everyone with respect and never resort to name-calling, empty threats or disparaging remarks.
We've been doing this 7 years and have never had a complaint filed or an inquiry from the BBB.
The key is hiring quality people, rigorous training and constant monitoring. We do not have quotas and do not pay commissions to our collectors.
All of you apparently have dealt with the big national guys with 60% annual turnover, pondscum who skim the cream and move on.
Not all collection agencies are crooks, just like not all of you are poor spellers... lol
my 2 baht.
professionally, how many different people do you think you contact regarding each collection? we have found that most, as you put it "big national guys" will contact anyone and everyone with a similar name living in an area where skip tracing has revealed the consumer may have lived.
i refer to this as payee phishing. the number of vulnerable people (ie. elderly, naive, financially stressed, etc) bullied into paying a debt that is not theirs is higher than decent people in the industry are willing to admit. how many people really understand how to use "validation" when given the chance? how many people will pay something to stop the constant telephone calls? how many consumers can read and understand the Fair Debt Collections Practices Act with enough acumen to advocate for themselves?
look, i understand entirely the industry "mythology" by debt collection being an ancient business and vital to the business world. but lets be real. what advantage does a business have selling for pennies a distressed debt or recovering 20%-25% (my guess) of the original debt?
I'm sure you will admit a persons credit report is one of the most important items for an American to keep clean and error free.
As you show, anyone can open up a collection agency. Pay your fee's to the three credit reporting agencies and you've got instant access to every Americans credit report. Not only access to look at it, but the ability to place items on it.
You have no laws requiring you to train your employees on the laws, consumer rights and such. You have no laws requiring that you do a background check on your employees to make sure they are not convicted felons or other types of people who should not have access to the most personal information on every American.
You claim 40% of your industry are "pond scum", that's 40% pond scum who can and do break laws, ruin peoples credit, harass, intimidate and use illegal practices to collect debts that many times aren't even the person's or are so past the statute of limitations it's not even funny.
That should be scary to anyone. What we have is a billion dollar a year industry with little to no oversight, no requirements on who can receive consumers personal information and no training/licensing requirements for who they hire.