Key Considerations When Hiring a Debt Collection Company

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1. Compliance with Regulations

• HIPAA/HITECH: Required for medical debt collection to ensure patient privacy.
• FDCPA: Protects consumers by limiting abusive behaviors (e.g., time of calls, threats).
• FCRA: Safeguards accurate reporting of consumer financial information.
• TCPA: Regulates the use of automated calls, requiring written or oral consent for contact via cell phones.

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2. Collection Methods

• Skip Tracing: Locates debtors using updated databases like DMV or internal records.
• Account Segmentation: Prioritizes high-risk accounts (e.g., bankruptcies, deceased cases).
• Debt Discounting: Offers reduced payment options or monthly plans based on the debtor's financial situation.
• Technology Use: Utilizes tools to assess "ccollection scores" based on a debtor's financial reliability.

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3. Types of Collectible Debt

• Credit Card Debt: A common target for collection due to compounding unpaid balances.
• Medical Debt: Often contractual, with collection campaigns or legal action if unpaid.
• Student Loans: Includes federal and private loans, with the government able to garnish wages.

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4. Fee Structures

• Flat Fees: Fixed charge per file, ideal for small-scale debt collection.
• Contingency Fees: Percentage of collected amounts (typically 25 - 45%), covering research, credit reporting, and legal services.

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5. Payment Options for Consumers

• Online Payments: Secure systems for manual or auto-drafted payments.
• Phone Payments: Toll-free or automated services, often with a convenience fee.
• Mail Payments: Direct payment via check or money order to a provided address.
• Wire Transfers: Available for larger sums, with instructions provided by the collector.

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Types of Debt Collection Companies

• Internal Collectors: Work for the creditor directly and are not FDCPA-regulated.
• Third-Party Collectors: Contracted by creditors, operate on contingency, and follow FDCPA rules.
• Debt Buyers: Purchase old debts at a discount and pursue the full balance for profit.

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Who Needs a Debt Collection Company?

• Private Loan Creditors: For unpaid personal or student loans.
• Government Entities: Aggressively collect taxes or student loan debts through contractors.
• Hospitals and Healthcare: Manage unpaid medical bills and negotiate payment plans.
• Credit Card Companies: Prioritize high-risk accounts to recover unpaid balances.

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Final Tips for Choosing a Debt Collection Agency

• Ensure compliance with industry regulations (FDCPA, HIPAA).
• Compare fees and collection strategies to align with your business goals.
• Evaluate the agency's success with your debt type (credit card, medical, etc.).
• Check for a secure, consumer-friendly payment system to improve debt recovery rates.

By selecting the right debt collection company, businesses can efficiently recover owed funds while adhering to ethical and legal practices.

Top Debt Collection Companies to Consider

1. Client Services, Inc.

• Founded: 1987 (St. Charles, MO)
• Specialties: Business process outsourcing, healthcare collections, account recovery.

2. Capital Collections, LLC

• Founded: 1996 (Fresno, CA)
• Specialties: Customizable recovery tools and software for cash flow optimization.

3. EOS CCA

• Founded: 1991, rebranded in 2001 under EOS Group.
• Focus: Respectful consumer engagement and debt resolution.

4. FirstSource Advantage

• Founded: 1995 (Amherst, NY)
• Specialties: International collections (U.S., UK, Australia).

5. Pioneer Credit Recovery (Navient)

• Specialties: Federal and state tax recovery, student loan debt collection.

6. Southwest Recovery Services

• Headquarters: Dallas, TX
• Specialties: Debt recovery, skip tracing, bilingual collections.

7. Alliance One

• Founded: 1999
• Specialties: Global collections with a focus on compliance and ethics.

8. IC System

• Specialties: Tailored packages ranging from contingency to fixed fees, serving healthcare, government, and small businesses.

9. PRA (Portfolio Recovery Associates)

• Founded: 1996
• Specialties: Publicly traded debt buyer offering personalized repayment plans.

10. Regional Adjustment Bureau

• Founded: 1971
• Focus: Student loan collections with customized payment solutions.

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Additional Companies to Explore

• Transworld Systems: Broad industry coverage, including education and healthcare.
• Medicredit: Fast, secure online platforms for bill payments.
• Commonwealth Financial: Nationwide collection services for various industries.
• Nationwide Recovery Systems: Focuses on healthcare and commercial clients.

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