The Next Step: Collection Agencies

Hi,
Over the next few blogs, I will be investigating various aspects of collection agencies. First it is necessary to get a general idea about the types of accounts collection agencies receive from their clients. About 10% of the accounts received consist of debtors who have overlooked, ignored, or forgotten to pay a small bill and have the means to pay it. 25%-30% of the people who have bills sent to collection are folks that have some financial difficulty and have chosen to ignore these particular bills due to frustration, lack of being able to arrive at a suitable payment arrangement with their creditor, and naivete about the collection process. The next 35%-40% are people that have severe financial difficulties, and in most cases, no ability to service their debts. These people need long term work- outs, and or settlements. Repeated attempts by creditors to deal with these people have resulted in numerous payment arrangements which have not been kept. The remaining 15%-20% are, in most cases, "professional deadbeats." These people have intentionally run up as much credit as they could with absolutely no intention of repayment. In most instances the addresses, phone numbers etc., provided to the creditor are not valid, and, in fact, accurate information was never given in the first place. When creditors send accounts to collection agencies, usually they also send comprehensive payment histories which include all communication with the customers and any broken repayment arrangements. Tomorrow I'm going to start talking about how a collection agency operates.
Until then,
Alan