There are a number of reasons why you might want to use a third party collection agency. They can help you with collecting debts that you may not have been able to collect on by yourself, they can help you to avoid having to hire a large number of people and they can also help you to increase your profits. However, there are a few things that you need to know before you decide to use a collection agency.
Accounts receivable outsourcing
The accounts receivable department plays a vital role in the long-term success of a business. Not paying your bills is detrimental to your business’s cash flow and potentially your bottom line. Outsourcing to a third party collection agency can help you get paid faster and free up your in-house AR Team to focus on other, more important tasks.
For smaller businesses, it can be a real hassle to deal with accounts receivables. Collections take time, money and expertise. When you add up all the steps, you end up with a very cumbersome process. Plus, the process can leave a bad taste in the mouth of the customer.
A reputable third party collection agency can use a variety of technologies to collect your unpaid invoices. They may offer specialized collection tools, skip tracing and even custom-built solutions designed to your exact specifications. In addition, they are legally required to maintain a comprehensive database of debtors. This helps them remain compliant with state-specific regulations.
Outsourcing to a third party is not only cost effective, but it is also a great way to increase your cash flow. With a variety of customizable services, you can streamline your processes and improve your customers’ experiences. You can also have a scalable staffing model, which eliminates the need to hire additional employees, pay benefits or manage your employees.
While a third party collection agency might not be able to collect as much as you’d like, they can give your company a leg up on the competition. The specialized collection tools they have available can help you to identify and prioritize accounts that have the best chance of being collected. And, they can help you to train your customers to pay on time.
While it’s true that some customers need gentle reminders, others may need a repayment program. An outside agency can identify trends in the market and design a tailored service. It might be the best way to go for your business.
There are a lot of things to consider when deciding whether to handle accounts receivables in-house or to outsource. But, the most important is to know that outsourcing can be a smart business move that will benefit your customers, your bottom line and your business.
Financial Asset Management Systems
(FAMS) is a third party collection agency located in Georgia. They collect debts, unsecured credit cards, and medical bills. The company was established in 1993, and is currently BBB accredited with an A+ rating.
In addition to debt collections, FAMS also provides asset management services. These services include skip tracing, administrative wage garnishment, and educational loan default prevention.
FAMS has an experienced management team that helps the company achieve top performance for each of its clients. As a result, the company is considered to be one of the leaders in the Accounts Receivable industry.
According to Buzzfile, the company’s revenue is estimated at $41.9 million per year. It is a member of several professional associations, including the National Association of College and University Business Officers and the Association of Credit and Collection Professionals.
FAMS collects on phone, energy, auto finance, and unsecured credit cards. Additionally, they offer collection programs for small businesses, educational institutes, healthcare providers, and other organizations.
Although FAMS has an A+ rating with the Better Business Bureau
, the company has received several consumer complaints in the past 36 months. Most of the complaints were related to inaccurate reporting and harassment.
Some consumers reported that they had not been provided with requested information and that they had to wait years to receive a response from the company. Another complaint concerned the company’s failure to verify a delinquent account.
A number of these complaints have been resolved, but some are still ongoing. One such case involved a business owner who was harassed by FAMS representatives for years. Other complaints included inaccurate documentation and failure to provide the required information.
When collecting on a debt, Financial Asset Management Systems must be honest about their identity. It is illegal for the company to threaten legal action against a debtor or to repeatedly call them.
Despite its commitment to providing top quality service, some consumers have complained that the company has failed to properly verify debts. This has caused delays in processing and payment of delinquency accounts.
TCPA lawsuit relating to the TCPA
The Telephone Consumer Protection Act
(TCPA) is a federal law that protects consumers from telemarketers. It allows consumers to sue for statutory damages for unwanted calls, text messages, and telemarketing. TCPA lawsuits have increased in recent years.
The TCPA limits the number of prerecorded messages and autodialed calls a debt collector can make on a landline. However, the TCPA does not limit the number of cell phone calls a debt collector can make.
In the case of the third party debt collector in this article, the plaintiff claimed the defendant made repeated annoying and illegal calls to a victim. When the debtor was told that the caller did not live at the address, the telemarketer became belligerent and began calling the debtor daily.
Aside from the TCPA, the plaintiff also claimed that the third party debt collector violated the Fair Debt Collection Practices Act and the Rosenthal Act. Those laws protect banks and other institutions from liability when they collect a debt after the consumer has complained.
This case was filed by Elisa Romero. She alleged that the telemarketer made nearly 300 calls to her home. Although she acknowledged her debt, she was not happy to receive a high number of harassing calls.
As the plaintiff, she sued Department Stores National Bank, a unit of Citigroup, for TCPA violations. The bank argued that the TCPA did not affect its legitimate business calls.
Although the Ninth Circuit Court of Appeals reinstated the plaintiff’s TCPA lawsuit, the decision has implications for defendants who challenge the TCPA at the pleading stage.
Plaintiffs’ attorneys have found creative ways to bring a TCPA lawsuit. For example, they have cited ambiguous language in Facebook’s footnote 7.
As courts continue to find the older TCPA claims constitutional, it’s possible that the amount of TCPA lawsuits will continue to rise. However, the increase may be slowing down.
Polsinelli has extensive experience defending TCPA cases in both state and federal courts. Their attorneys have experience defending individual suits and multi-million dollar class action lawsuits. They have a thorough understanding of all aspects of the TCPA and the laws governing telemarketing and vicarious liability.
Regulation of third-party collection agencies
Debt collection agencies are subject to a number of regulations. The federal government and state governments have historically been on the consumer’s side. But with more scrutiny on the industry, debt collection practices have begun to change. Luckily, there are several steps that you can take to make sure your debt collection agency is complying with the rules.
Before you contact a consumer, you must obtain his or her permission. This can be done by a written statement, an email, a phone call, or even text message. If you receive a verbal response, you must wait seven days before you contact them again.
In addition to obtaining the consumer’s permission, debt collectors are limited to making three attempts per day to reach the consumer. This rule also applies to voicemail and messages left on a consumer’s phone.
Debt collectors are also prohibited from using abusive conduct or deceptive means. For example, a debt collector cannot harass a consumer by attempting to intimidate them, threatening to arrest them, or utilizing obscene language.
Regulation F is a new set of rules governing the way third-party collection agencies collect and communicate with consumers. The regulation was issued by the Consumer Financial Protection Bureau
(CFPB) on July 30, and takes effect November 30, 2021.
One of the major changes proposed in Regulation F is the 7/7/7 rule. Collection agencies can only contact a debtor seven times in seven days. That includes voicemails, unanswered calls, and messages left on the consumer’s cell phone.
Regulation F also requires agencies to keep a record of their communication with debtors for at least three years. There are a few exceptions to this rule, including out-of-service calls, misdirected calls, and calls placed to authorized third parties. A creditor is not obligated to provide the information requested by a debt collector, such as the name of the debtor or the debtor’s address. Similarly, the creditor may not use a fictitious name.
As the first significant debt collection rulemaking since the FDCPA, Regulation F has the potential to affect the way debt collectors and creditors communicate. However, it is important to remember that these rules apply to all debt collection businesses.
If you like what you read, check out our other articles here