What to Look for When Selecting a Collection Agency

When choosing a collection agency to pursue your overdue accounts, there are several crucial aspects to take into account.

May 15, 2024 | Gary Belleville, Licensed Collection Agency Manager

When selecting a collection agency to go after your delinquent accounts, there are several key factors to consider, especially in light of recent regulatory changes like Reg F instituted by the Consumer Financial Protection Bureau (CFPB). Here’s what to look for:

  1. Regulatory Compliance: Ensure that the collection agency you choose is fully compliant with all relevant regulations, including Reg F for consumer debt. This means they should be transparent about debt details, provide clear instructions for resolving the debt, and offer options for disputing it.

  2. Cost-Effectiveness: With the changes brought by Reg F, it’s crucial to assess the cost-effectiveness of the services provided by the collection agency. If a significant portion of collections is done through mail correspondence, paying excessively high percentages for simple letters may not be justified. Look for agencies that offer transparent pricing structures and competitive rates.

  3. Track Record and Reputation: Research the track record and reputation of the collection agency. Look for reviews, testimonials, and case studies from past clients to gauge their success rate and effectiveness in recovering debts.

  4. Specialization: Consider whether the collection agency specializes in your industry or type of debt. Agencies with experience in your specific field may have a better understanding of the unique challenges and nuances involved in collecting debts within that industry.

  5. Technology and Resources: Evaluate the technological capabilities and resources of the collection agency. Advanced tools and resources can streamline the collection process, improve efficiency, and increase the likelihood of successful debt recovery.

  6. Communication and Transparency: Choose an agency that prioritizes clear communication and transparency throughout the collection process. You should be kept informed of progress, and the agency should be accessible to address any concerns or questions you may have.

  7. Ethical Practices: Ensure that the collection agency adheres to ethical practices and treats debtors fairly and respectfully. Unethical or overly aggressive tactics can damage your reputation and potentially lead to legal issues.

  8. Customized Approach: Look for a collection agency that offers a customized approach tailored to your specific needs and preferences. One-size-fits-all solutions may not be as effective in recovering debts from your particular customer base.

By carefully considering these factors, you can select a collection agency that not only meets your needs but also helps you navigate the evolving regulatory landscape effectively.


  • Tiered Pricing: An agency that will collect by Written Demands or simple reminder, and won’t charge a %
  • Diplomatic Approach: Believe it or not, it’s not what is said, it’s who’s saying it! If you know your agency has a soft option, you may not wait as long to get them involved
  • Robust Reporting: Your agency should be able to show you your recovery rate, net collections, total assignments, and what the agency fees are in dollars and as a %.
  • Online Interface: It’s 2024. Agencies that require you to fax or provide copies of account information, say goodbye to.

What to Watch Out For:

  • Skimming: Unless your balances are well over $1,000 % Agencies/attorneys will skim accounts. Those under hardly get worked.
  • Overcharging: Most money is collected through the mail. Make sure you are not paying full Contingency fee for letter collections
  • Good Money After Bad: Be wary of agencies/attorneys that want to charge you for skip tracing, court costs, credit checks, etc. Their collection fee should cover those.
  • Compliance: Businesses are finding out that using an agency/attorney that fails to follow CFPB’s Reg F can be very costly.

Gary Belleville is a Licensed Collection Agency Manager. and Independent Contractor with TSI.

His clients have included Marriott Hotels, Medical and Dental Practices, Banks & Credit Unions, Trades Contractors, and Everything in between. From dress shoes to work boots he’s walked with them all in providing Business Owners the tools to accelerate their cashflow and restore relationships for future business through TSI’s Trademark, Accelerator©, Profit Recovery, and Collections services. 

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