If you are looking at our website, and your primary objective is to go with an agency that offers the best rate, please consider these two scenarios of a Pennsylvania business turning over a portfolio of accounts valued at $10,000.
$10,000 @ 25% Contingency with a 10%
recovery
Client’s Share $750.00 less
PA tax*(17.50) Due Client $732.50
$10,000 @ 50% Contingency with a 20%
recovery
Client’s Share $1000.00 less
PA tax(70.00) Due Client $930.00 *Except where exempt, Pennsylvania companies are
required to pay PA state sales tax on agency’s fee.
In our example, the agency with the higher fee actually returned more money. This does not mean that a higher rate will guarantee you more recovery. This example illustrates, due to the intangibleness of the business, you have more to consider than rate.
More than rate, you should consider the following:
- Will all of your accounts be worked? Some agencies will ignore certain accounts based upon predictive statistics or balances.
- How will your accounts be worked? Some agencies will only send letters. Some will only try calling a set number of times. Some will be shipped to an overseas call center. Many don’t offer legal services. Some low rates significantly slide up when different collection services are employed.
- How will you know your accounts are being worked? You should be able to receive status reports and regular scheduled statements with payment.
- Are your accounts being worked ethically? Not all agencies abide by established Fair Debt Practices. If they get caught, you too may have problems.
- Is the agency insured? What other services do you use that you would
sacrifice this point?
- Do they credit report? Sometimes time will help recovery. A good reminder of delinquency is when a credit report is being examined and a lender wants delinquency cleaned up before making a loan.
To talk with us about each of these points and how we will handle your accounts, click here.