Receivable/Accounts - Information for Credit and Collection Issues

Tuesday, February 21, 2012

Collection Agency Credentials


Whether you deal with an existing collection agency, or you are considering retaining a new collections partner, their accreditation or professional affiliations are an important indicator of the company’s integrity and how they interact with other companies, and represent you to your delinquent consumers and clients.

No agency can be a member of every organization, or certified under every standard.  However, which associations they hold important is a key insight to their business model and what core values are important to their principals.

Below are a sampling of the organizations with which I am personally familiar, and more than previous blog articles, my opinions and biases will show through based on my experiences with these companies.  Please understand that every agency has a unique work flow and methodology, and while this article is not an empirical evaluation, it should open a conversation with your collection vendors on what associations they value, and how they serve their business process.


Consumer Associations

·         Better Business Bureau – Not all agencies are Better Business Bureau accredited, but they may or may not have complaints registered against, them, which they may have responded to or not.  A high volume of complaints may indicate aggressive collection behaviour, or contentious claims by their clientele.  A lack of response by the company to complaints may indicate a disregard for their reputation, and their clients’ reputation.  The cost and manpower required to maintain a membership with the BBB and respond to complaints is minimal, and I believe that a member company truly cares about their image to the consumer.  A company can be researched at the BBB site mwco.bbb.org/find-business-reviews


Business Associations

·         Chamber of Commerce – Companies involved with a local Chamber of Commerce may have a strong local focus or presence, or an interest in contributing to their local community.  While Chamber meetings often involve local B2B networking, it also can involve involvement in areas of expertise, being a resource ot the community.  Unlike other memberships and affiliations, being a member of the Chamber can be as much or as little a part of the company’s involvement with the community as they put into it – it would be worth asking how your agency that displays their Chamber membership participates in the local community.  More information can be found at the Canadian website, http://www.chamber.ca/.


Professional Organizations

·         Ontario Society of Collection Agencies – I am not aware of other provinces having collection agency associations, but I have had dealings with OSCA, and been a member.  Members often receive notice of pending changes to the Collection Agencies Act of Ontario, letters issued by the organization to the government, and letters from the Ontario collection agencies registrar to members of the association.  An agency member of OSCA would be interested in keeping abreast of legislative changes that will affect their industry.  An annual convention is held and attended by member companies.  The organization’s website is located at www.oscagencies.com.

·         Receivables Management Association of Canada – the RMA is a new organization, but is aligned differently from other collection organizations.  This group of companies is driven by collection agencies, creditors, and other affiliated services that are involved with the credit cycle.  While this organization has only been in existence a short time, and only had one convention as of November 2011, their goals are quite ambitious – forming a central lobbying point to the government on legislative changes, improving the image of companies involved in the accounts receivable industry, and encouraging communication between companies representing various credit cycle services for mutual benefit.  A member of this organization could be characterized as invested in their industry and interested in driving change beyond their corporate borders.  The RMA website is www.rmacanada.org.

·         ACA International – The Association of Credit and Collections Professionals is heavily geared towards servicing US collection agencies and creditors.  Members have access to a large database of information, and there are a number of FastFax information sheets on domestic US as well as Canadian laws and collection statutes available to members, publications and newsletters that contain some Canadian content.  However, the majority of focus of this group is on American collection laws and practices.  I would say that a member of this company is likely interested in credit regulations primarily in the US.  Their website is www.acainternational.org.


Vendors & Service Providers

·         DRN Commerce is company that provides a shared data platform and information flow between collection agencies, law firms, and creditors.  Unlike other data mediators, their Collectlink program allows each party to operate on their own proprietary system, and then transfer data back and forth through DRN’s platform.  Furthermore, Collectlink has a number of web-driven functions, such as flagged notes on files, document upload and sharing, liquidation reports, active inventory report, and batch track reports that give a common basis of communication and measurement of performance, which is useful in conference calls and regular performance touch points.  Their website is found at http://www.drncommerce.com/.

·         Trans Union Services is one side of the companies colloquially referred to as “the credit bureau” in Canada.  In the collection industry, many professionals will show a personal preference for TUC or Equifax.  Trans Union is certainly more accessible to collection agencies to become members, and list outstanding accounts to their database, but in return, their trace tools are also equally accessible, with their ATT Scrubs, full credit bureaus with consumer telephone numbers, and alert functions.  Their IT and customer support is also excellent.  A collection agency that is a member of Trans Union Services is certainly listing their data to the credit bureau, which will benefit clients in the long run.  The Trans Union website can be found at http://www.drncommerce.com/.

·         Equifax is the other consumer reporting agency that is ``the credit bureau``.  Equifax is a more diversified company, with commercial credit bureau reports, analytical reports, and a robust batch processing for bureaus.  Equifax in recent years has started scrub functions, alert flags on credit bureaus, and added telephone numbers to their database.  They are more stringent in bringing in collection agencies, but use the same reporting formats as Trans Union.  As said previously, every agency will have a bias towards either TUC or Equifax, but Equifax certainly provides a commercial component that TUC does not.  Their website is www.equifax.com.

·         TeraNet is an excellent  skip-trace tool for property searches, writ searches, property sale history and more.  The agencies I have experience with that use this tool are serious about large balance files, skip-tracing, and legal action.  The website can be found at http://www.teranet.ca/.


Certifications

·         ISO 27001 is an international standard and certification for information security, and information security management.  A number of national clients require their agencies to acquire this certification before assigning business to them.  Having been heavily involved in the certification process, I can tell you that acquiring the ISO 27001 certification is an expensive and complex undertaking, and requires an agency to technically document all internal processes, and put controls in place to ensure network security, data encryption, proper network architecture, employee screening, and handling of funds.  A company with this registration has a focus on risk management, full documentation, and process improvement.  More information can be acquired on this certification at www.iso.org


Conclusion

This is not meant to be an exhaustive list, but certainly touches on the concept that the memberships and tools available to a collection agency are indicative of their corporate personality, work plan, and successes.  I would encourage any company looking at a prospective collection agency, or with an existing collection service partner should inquire to their service vendors what affiliations are important to them.

If you have any questions regarding the value of any of these affiliations, or one I have not listed in this article, I am always happy to share my experience and opinions, and encourage anyone to contact myself and have a conversation.

Blair Wettlaufer
Kingston Data and Credit
Cambridge, ON
226-444-5695