How Do You Due Diligence A Debt Collection Agency?
Debt collection agencies assist companies who extend credit to collect bad debt. Performing due diligence is an important aspect in the hiring of a debt collection agency. There are many collection agencies dedicated to performing their duties while adhering to governing laws and professional ethics. The following steps are set forth to help management with its business plan in performing the due diligence. Verify that the collection agency recovering bad debt for the company that extends credit has met all licensing and business registration issues. Most states require that debt collection agencies be licensed by a governing body, such as a State Board of Collection Agencies, before they can collect bad credit accounts. Typically, the state of licensure will also require that the collection agency post a fiduciary bond, to protect the creditor in the event that the agency fails to remit monies owed. If collection agencies are required to be licensed in your state, make sure that the a
