Why Creditors Should Hire a Collection Agency
Among many important business decisions creditors and service providers must make is how and where to allocate delinquent or defaulted accounts and whether to outsource collection activity. Although in-house collections may be economical for low-balance, low-volume, or short-term needs, how should a business proceed when those accounts accumulate or demand greater attention?
Overhead costs of in-house collections may not only detract from the core business functions of creditors and service providers but have the potential to become liabilities due to the criticality of getting the right staff with the right training, resources, and compliance management systems necessary for success in a highly regulated environment. Collection agencies remove the onus of downstream account management so businesses can provide their best services and resources upstream in the account lifecycle.
Debt Collection as a Core Business Function
Collection agencies specialize in recovering accounts receivable with collection activity as the lifeblood of their business. Successful businesses need well-defined scopes to which teams tailor specialized skill sets and efficient operational systems as opposed to spreading resources too thin or over-diversifying. Collection agencies allow businesses to focus on reaching primary business goals and growing core areas of service rather than over-investing in ancillary collection activity or suffering unrecovered losses due to a lack of internal resources for collection activity.
Alleviate Resources for Active Accounts
Outsourcing collection activity to a professional collection agency alleviates creditors’ internal resources to focus on active accounts. By focusing on what’s ahead/revenue-generating rather than what’s behind/non-performing, current customers are better served and retained, brand reputation is better managed, and profit margins are better grown. Driving a car forward while looking in the rearview is not a recipe for success any more than creditors focusing on recovering losses rather than growing assets. By hiring a collection agency to recover losses, creditors receive revenue with a streamlined system and minimal investment. Further, non-performing accounts require consumer communications and requirements distinct from active accounts and agents need specialized training.
Built for Complex Legal Requirements
Collection agencies operate within a complex and continuously evolving matrix of local, state, and federal regulations and legislation. While creditors are not all subject to the same rules as one another or as collection agencies, collection activity is under oversight from regulation enforcement agencies including the CFPB and FTC to ensure fairness to consumers by adherence to the Fair Debt Collection Practices Act (FDCPA) and Regulation F, the Fair Credit Reporting Act (FCRA), the Telephone Consumer Protection Act (TCPA), and more. Data privacy and security, consumer communications, operational workflows, insurance, licensing, and records management are just a few of the factors that require close consideration and appropriate provisions for compliant debt collection operations.
Connected to Professional Networks
Hiring a collection agency that is demonstrably committed to professionalism, standards of excellence, and client/consumer protection is an investment in risk reduction and brand protection. Collection agency involvement in major receivables management industry trade associations such as Receivables Management Association International (RMAI) and ACA International benefits member collection agencies through ongoing professional development, regulatory guidance, legislative advocacy, and standards of best practice. RMAI and ACA both offer individual and business certifications, with RMAI’s business certification program known in the industry as “the gold standard.” Creditors should look for an agency whose service, compliance, and data security policies and procedures contribute toward a positive reputation and audit success.
Experts Provide Improved Performance
With experienced leadership, highly trained representatives, dedicated workflows, and proven strategies, quality collection agencies can provide increased ROI for creditors through improved performance, efficiency, and compliance. A quality collection agency will have the expertise to advise creditors and service providers regarding whether they may be a good fit for an organization and its collections portfolios, as agencies vary in niche, scope, and specific services. When a creditor or service provider can develop a lasting, trusting business relationship with a collection agency, it’s a win for all involved.
D&A Services, LLC is a national asset recovery company serving the needs of national, state, and local financial institutions throughout the United States. A business member of ACA International and RMAI, D&A Services is an RMAI Certified Receivables Business and has received awards and recognitions from major national creditor clients for process and consumer experience excellence. Operating on state-of-the-art technology platforms, our facilities and systems exceed requirements for our SSAE 18 Type II, PCI-DSS, and ISO 27001 certifications.
To learn more about D&A Services, LLC please visit dnasllc.com. To inquire about our service offerings, please contact Greg Neely at 312-854-2567 or [email protected].
About D&A Services, LLC
Founded in 2009 as Dynia & Associates, D&A Services, LLC changed its name in 2015 to better demonstrate how its business focus had evolved. D&A Services is located in a suburb of Chicago, IL with additional satellite offices in Houston, TX, and St. Petersburg, FL. D&A is a nationally licensed and bonded collection agency offering pre-charge off, early out, and third-party collection services for clients across a variety of industry verticals. Their diverse experience enables them to provide clients with the financial performance they need while minimizing risk.
