When searching for a debt collections agency, many businesses will turn to internet search engines and use the terms "local collections agency" or "collection agency near me". An agency that is located in the same geographic area as the business makes sense, as one of the qualifications of a good debt collections agency is state licensing. Licensing can be drastically different in each state and many require agencies are to be licensed in the state in which they are collecting.
Although finding a local debt collections agency is a good idea, there are valid reasons for finding a partner who is licensed nationally.
Why Search Local?
As more consumers are made aware of their rights during the debt collections process, more businesses are doing their research to find a qualified and licensed agency to avoid litigation. Before paying on a debt, consumers have the right to verify the claim is accurate and that the collections agency is legitimate to collect that debt. Not every state requires that debt collectors are licensed with their state, however, some states do. Even if the state doesn't require licensing, they may require the agency be bonded in that state. If the debt collector is unlicensed, the consumer can file a complaint with their State Attorney General's office or the Consumer Financial Protection Bureau under the FDCPA (Fair Debt Collection Practices Act). If the compliant is taken to court, the business and the debt collection agency may face financial punitive charges.
Why work with Nationally Licensed Debt Collection Agency?
Since every state handles collection practices differently, it may be a challenge to locate a trusted partner in debt collection in every state. Why would you need a debt collection agency in every state? Because people move.
With the U.S. Mover Rate at a record low, the Census Bureau still reports that 11.2 percent of the population moved between 2015 & 2016. Some states may require the collection agency to be in the same state at the creditor. Some states require the collector be in the same state as the debtor. If the debtor moves out of state, will your business take the time to research and locate another debt collections agency? Or would you rather work with an agency where you've already established a relationship and level of trust?
What you Should expect from a Debt Collections Agency partner
In order to successfully increase the chances of debt recovery, your business must work with a collections partner that has the following qualifications:
- Nationally licensed, bonded and insured
- Specialized in your industry
- Compliant in your industry
- Specialized in the types, ages and sizes of debts of your industry
- FDCPA Compliant collections process
- Transparency and Reporting
- Fair Fees
An agency that meets these qualifications will be your go-to for all of your debt collections or accounts recovery. There will no longer be the need to review state licensing requirements or research if your collections partner can collector from particular debtors. Instead, your time can be spent working with the agency to help increase your recovery rate and ensuring the continued growth of your business.