Sunday, December 14, 2008

Does a Collection Agency Negotiate the Rate?

By JR Rooney

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

Yes, most collection agencies do offer a discount if your company assigns them multiple accounts or the balance is very high or the account is new.

Typically, there are 3 rules to follow to determine what rate your company will be charged:

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

Age of account. An account that is 60 days past due has a better chance of being collected than a 730 day old file. A Collection agency that get paid based on how much they collect will not have enough incentive to work on older past-due accounts, much less offer you a reduced rate on them.

Volume discounts. If you have a lot of accounts to collect, you should be able to secure a smaller rate. For example, if your company has 25 past due accounts for $25,000 that are less than one year old, you should get 30 percent to 35 percent off regular rates, unless you entered into a different kind of arrangement. - 16928

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