How Debt Collection Works, Part 2: Pick Your Service

You’ve already received some advice about how to determine if IC System is right for your office. Now you need to pick the right collection service. To continue our blog series about how debt collection works at IC System, I sat down with Tom Mayfield, a District Sales Manager with over ten years in debt collection sales experience. Tom shares his insights about what services will make the most significant impact on your recoveries to return more revenue to your office.

Credit Reporting
IC System offers a credit reporting service on select accounts. Not every account can be credit reported. But for eligible accounts, there are few more compelling incentives to pay than credit reporting. “For people that are credit-conscious, they don’t want a past-due account on their credit report,” Tom explains. If the consumer cannot afford to pay now, a mark on a credit report will remind them to pay later. “Everyone in our country today needs credit,” Tom adds, “so it helps leverage our situation and increase the account’s collectibility to have the credit reporting option.”

Credit Monitoring
Credit Monitoring works like a radar, waiting for blips on the consumer’s credit profile that denote significant changes. These changes may include, but are not limited to, the opening of a new tradeline, a loan payoff, or a similar credit event that suggests the ability to pay. Credit monitoring begins after the initial period of collection activity has been exhausted, but once IC System sees the blip, it resumes collection activity.

“If we’ve exhausted efforts and we’re not successful with the initial collection attempts, Credit Monitoring gives us an opportunity to go back and reach out to a consumer again,” Tom points out. “If we find out there’s a new mortgage or job application, the consumer is more likely to pay on these calls.”

Non-Litigation Attorney Referral
Sometimes straight debt collections isn’t enough. In those cases, non-litigation attorney referral creates urgency with calls and letters from an attorney on IC System’s behalf. “We’re using the power of a law firm’s letterhead in these situations because no one wants to hear from an attorney,” Tom says. IC System works with a law firm that completed a thorough screening process by our team. However, this service is not available in all states.

Litigation Referral
Typically after non-litigation attorney referral services, IC System will review an account to determine if litigation is a viable option for collection. If this is the case, we will make a recommendation for litigation to your office. Given the potential fees associated with this service, litigation is recommended “for high balances that could be in a situation to pay,” according to Tom.

Recovery Plus
IC System has two main products. The most popular is Recovery Plus, which Tom says offers a “win-win for both the consumer and the creditor’s office.” The service begins with an initial letters-only phase, with a customizable cost-per-letter fee charged the client. Any monies recovered during the letter phase, however, go directly to the client. “The nice thing about the first phase is that people are not going to get collection calls or be subject to credit reporting,” Tom says. “And if the consumer pays during the letter phase, the client will save as there are no additional contingency fees during this phase.”

The second phase is an intensive collection phase with consumer-friendly calls and letters, and a contingency fee applies to the amounts recovered during this phase. Tom recommends Recovery Plus for medical and dental offices, especially “offices without a committed receivables staff that would send letters and make phone calls from within the office.” Its two-phase approach is specifically designed to preserve sensitive business relationships.

Premier Collect
Tom recommends Premier Collect for other industries, “where it’s clear that people aren’t going to pay after a single letter.” This intensive collection service begins with collection calls and letters, still using a consumer-friendly tone but designed for customers who may be “more difficult to convince to pay.”

Credit Reporting and Credit Monitoring are usually used in tandem with Premier Collect. Tom explains that the best part of this product is “the client only pays their contingency fee if we’re successful.”

Choosing What’s Right for Your Office
Every business has unique needs when it comes to collections, and that’s why it’s crucial to weigh the options and determine what will work best with your customers. “There is no one-size-fits-all approach,” says Tom. “But after a brief conversation, we can quickly make a strong recommendation for the services that will be most effective.” For a free consultation, call 1-800-279-3511.

In the next entry of this How Debt Collection Works blog series, we’ll talk about the best practices for placing debt with a collection agency.

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About the Author:

Brian Eggert is a business development specialist and writer for IC System, one of the largest receivables management companies in the United States. With 18 years in the collection industry, Brian's experience includes operations, client service, proposal writing, blogging, content creation, and web development.