Why You Should Only Hire a Collection Agency That is Licensed and Bonded
On numerous occasions, TGA Legal has been hired to collect against another collection agency that had collected money for a client, yet did not remit the funds in a timely manner or at all. Most recently, we received a referral from a client to help a neighboring business collect on monies due to them by a collection agency that failed to remit the monies they collected on their behalf. This is one of the many reasons why you need to be very careful of collection agencies that quote a low contingent collection rate, as they are most likely not licensed and bonded, which means there is no governing body that audits them, so they can pretty much do whatever they want with your files. In other words, anybody can open up an LLC and then call it a collection agency without actually being licensed and bonded and it is typical of an agency like this to quote a very low rate just to get your business. I cannot begin to tell you how many times, in my 32-year career in collection law, a client of ours initially used one of these fly-by-night companies and then had to turn that collection agency over to TGA Legal for not remitting funds, foul play, CFPB and FDCPA violations, etc. A nightmare that could’ve been easily avoided
In addition, using a licensed and bonded collection agency can provide several benefits and protections for both the creditor and the debtor. Here are a few reasons why you should consider using a licensed and bonded collection agency:
- Legal Compliance: A licensed collection agency is regulated by state and federal laws and regulations. This means that they are required to adhere to ethical and legal practices when collecting debts, such as the Fair Debt Collection Practices Act (FDCPA) and the Consumer Financial Protection Bureau (CFPB) regulations. Using a licensed collection agency can help ensure that your debt collection efforts are compliant with the law and minimize the risk of legal consequences.
- Professionalism: A licensed and bonded collection agency is held to a higher standard of professionalism and ethics. They are required to follow specific guidelines and best practices when dealing with debtors, which can help protect your reputation and brand.
- Higher Recovery Rates: Licensed and bonded collection agencies have the resources and expertise to recover debts more efficiently and effectively than an in-house collection department or a non-licensed agency. They have access to advanced technology and specialized tools to locate debtors and collect debts, which can lead to higher recovery rates.
- Protection against Fraud: A bonded collection agency has purchased a bond to provide financial protection to their clients. This means that if the agency engages in fraudulent or illegal behavior, their client can file a claim against the bond to recover their losses.
- Avoiding Lawsuits: Using a licensed and bonded collection agency can help you avoid lawsuits from debtors who feel they have been mistreated or harassed. Licensed agencies are required to follow strict guidelines for debt collection, which can help prevent legal disputes and save you time and money in the long run.
Overall, using a licensed and bonded collection agency can provide several benefits and protections for both the creditor and the debtor. It is important to choose a reputable agency that has a proven track record of success and compliance with state and federal laws.
Todd Gieger and the team at TGA Legal are all very well trained and affluent in good business practices that all are compliant with the CFPB, FDCPA, HIPAA rules, and regulations.