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03/10/2010

Collection Agency

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  Collection Agency business.

  Business Overview

  For businesses, having customers who owe money is not only unpleasant but can cause serious cash flow problems and even force them to close their doors. Of course, they can hire a collection agency -- but most big-time firms are only interested in going after the big accounts that promise big money. But you can save the day with a homebased collection agency. You'll track down elusive debtors using the same skip-tracing techniques private detectives employ, then make arrangements with them to pay off those old bills. You can also specialize in finding errant parents who owe child support or people who have health-care debts.     Debt collection is big business: According to ACA International, the Association of Credit and Collection Professionals, outstanding consumer installment debt totaled $1 trillion in one recent year and new accounts totaling approximately $122 billion were placed for collection with professional agencies. So there's plenty of work for you!    The advantages to this business are that you can work at home, it's always challenging, you get to solve mysteries every day, and helping people repair their credit problems while getting your clients their hard-earned money can be quite rewarding.    You'll need a good understanding of collection procedures -- what you can and cannot legally do -- including knowledge of the Federal Fair Debt Collection Practices Act and applicable laws in your state. If you're going after health-care dollars, a good grounding in health insurance policies and billing procedures is a must. You should also have an obsessive personality when it comes to tracking down debtors, good communication skills to work with people instead of against them to resolve payment issues, and a healthy dose of self-esteem so you don't take tirades personally.

  The Market

  Your clients can be businesses of all types, but good ones to start with are retail establishments stuck with bounced checks and doctors, clinics and other health-care providers landed with unpaid bills. If you plan to specialize in deadbeat dads and moms, you can offer your services to state and county agencies or to parents themselves. According to a recent U.S. General Accounting Office report, state and county agencies in 37 states were contracting with or planning to contract with private collectors to secure past-due child support payments.    Land your clients by calling and directly soliciting their business -- with the service you're offering, you should attract their attention quickly. Doctors, as everybody who's ever tried knows, can be almost impossible to reach by phone, so ask to talk to the office manager.
  Place ads in your local Yellow Pages. Network among professional, civic and small-business groups, and give seminars or workshops.

  Needed Equipment

  Most states will require you to be licensed and bonded, so be sure to check with your secretary of state or ACA International. You'll also need a computer, a laser printer, a fax machine, the usual office software, special collections software, and a telephone headset so you don't get a cauliflower ear from hours on the phone.
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