For example, Arkansas requires that third party collectors be licensed and bonded in the state. Texas requires the posting of a bond. If the collector has several complaints on file, then look else where for your needed help. Debt collection is usually done on a contingency fee basis. This means that a collector retains a portion of the money that is collected from the debtor.
Some collectors require an up-front fee but take a lower percentage of the amount recovered.
The clear advantage of contingency fee billing is that you do not pay for uncollected accounts. Additionally, cash flow is matched as the collector is paid when the debt is collected. Send reminders, but few tactics are more persuasive than a telephone call to the debtor. If an account becomes past due, send out a series of past due letters. Set an absolute due date before the account is turned over to a collector such as 120 days past due.