If your business is looking to outsource debt collection, commercial debt collection is a good option to consider. Outsourcing debt collection can take worry off your plate and get your business the money it is owed in a way that is safe and proficient. Commercial debt collection works to collect money that is owed between businesses for various types of accounts or production. For example, if a large business orders product from a small business, and they do not deliver, they may turn to commercial debt collection. Commercial debt collection can work for businesses of all sizes and may be a good option for your business to receive its debt pay-offs without the hassle of doing the work.
What types of debt do they collect?
The types of businesses that commercial debt collectors work for vary across the board. Some examples are colleges and institutions, major companies, sales companies, and construction companies. The companies can be of all sizes and provide a wide range of services. They work to collect outstanding debts on accounts between businesses. The reason for debt collection is to ensure that funds that were promised or agreed upon by a contract are delivered. Businesses often outsource to commercial debt collectors when their own attempts at collecting the debts on their outstanding accounts between contractors and other businesses have proven unsuccessful.
How do they collect?
Commercial debt collectors operate through first determining who the business owner is or who is in charge of paying bills. It’s essential that the right party is reached to ensure pay-off can happen in a timely manner and that the topic of finances is discussed with the right person. Once the correct person has been identified, the commercial debt collectors are then able to make calls at regular intervals. These calls are used to determine which payment method will work for both parties and the timeline they will make payments on. Having a commercial debt collector be the one to contact owners of outstanding accounts can be used to ensure that your business remains profitable and receives the money it deserves.
What differentiates them from consumer debt collection?
When determining the difference between consumer and commercial debt collection, it’s all in the name. Consumer debt collectors work for a business to collect debts that are owed by an individual to the business. Consumer debt collectors are subject to FDCPA governance (the Fair Debt Collection Practices Act), whereas commercial debt collectors are not. This doesn’t mean that commercial debt collectors are free from all rules, though. Commercial debt collectors are not able to use tactics that are aggressive, threatening, or illegal.
Are they regulated?
Regulations also differ based on the state that a commercial debt collector is in. Some states have a requirement for commercial debt collectors to be licensed and bonded, and there are also associations that work to ensure fair practices.
If your business is looking into outsourcing your debt collection services, it’s time to look into which accounts have outstanding debts. If your primary debt issue is individuals and consumers, a consumer debt collection is best. However, if you have relations with businesses where accounts are unsettled, outsourcing these debts to a commercial debt collector can assist you by taking over the process.