Watch Out For Third Party Scams

The caller was full of righteous indignation. Finally it was his turn to be offensive. For the longest time we had been chasing after him for payment, finally, turning him over to a collection agency. I am frequently questioned as to my policy of not writing an account off to bad debt soon after turning a delinquent account over to a collection agency. This particular account, while in the hands of an agency now for several months, was still on the books and he was still receiving statements. That was the rub. The caller claimed to have paid the past due bill directly to the collection agency and to prove it; he was sending me the front and back of the cancelled check. Sure enough, he had paid the bill. The collection agency just did not inform us, or, more importantly, they did not send us our share.

It happens all of the time.

Another agency I encountered made it a practice to work a claim for several months and then inform us that it was going to be necessary to sue. They requested up front court costs of $750.00. Then, a few months later, after making a request for documents to support the claim, which invariably they would not receive, we would receive a notice that they were closing their books on the file, without filing suit or returning our $750.00.

Collection agencies get away with these practices because no one is watching them. Most companies, I believe, write the balance off their books within thirty days of assigning the claim. It is out of sight, out of mind. So many agencies are remiss in sending updates about the status of the claims and companies do not except much of a recovery. This allows the unscrupulous agency to collect money from a assignment and keep it.

This practice is not limited to collection agencies either. Years ago I had a claim large enough to sue and the attorney we used was very diligent about getting a very good settlement which he kept. After months of trying to collect it from the customer, I was now faced with the task of collecting it from my own attorney. A threat to notify the bar was enough to get paid, but it was the idea that I had to go that far. Again, had the account be written off and forgotten, who’s to know?

That is why I believe you should treat legal items just like any other account. You’ve simply taken the next step. The time to write them off is when someone tells you the customer cannot be found or the courts have found not in your favor. And you need to watch your agencies and insist on frequent reports. Same goes for attorneys. Work with ones that do not intimidate you, have a good reputation and are forthcoming with the money they recover.

Strategic Credit Management Solutions can help you find reputable collection agencies. (We are not a collection agency). We can also help you find lawyers that will help you without helping themselves to your hard earned cash. See our website at http://powerscredit.com/. You can also e-mail us at patrickpowers@sbcglobal.net. Your comments are always welcome.