Thursday, January 10, 2008

Is It Possible To Negotiate Debt Collection Rates?

By JR Rooney

I'm always looking for ways to cut costs. Do collection agencies give discounts?

Yes, a well established collection agency will offer a discounted rate if your company sends them multiple accounts or the balance is very high or the account is new.

Generally, there are three rules to follow to determine what rate your company will be charged:

Balance due. If you have a past due account totaling $5,000 or more, your company might be able to get a discounted rate.

Age of account. A past due account that is 60 days old has a greater chance of being recovered than a 730 day old account. Collection agencies that get paid based on 100% commission will not have a large incentive to work on older past-due account, much less offer you a discount on them.

Volume discounts. If you have many accounts to collect, you should be able to secure a discounted rate. For example, if your company has twenty five delinquent accounts for 25K that are less than a year old, it should get 30 percent to 35 percent off regular price, unless you entered into a different kind of arrangement.

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