Receivable/Accounts - Information for Credit and Collection Issues

Sunday, January 27, 2013

Surviving the Collection Agency Salesman

Before I was involved in third party collections, I was a credit manager, and very popular – collection agencies called me all the time, because they wanted my company’s business.  I actually met with a number of these agencies, and while a number of them were just represented by slick sales representatives, I found one that ended up fitting my company’s needs and I chose them for my collections vendor, and they proceeded to add a solid revenue flow to my company`s bottom line without causing complaints.

In the years that followed, I ended up working in the collection industry – while I was primarily occupied with collections, operations, and management, I worked alongside some excellent sales managers, been involved with some sales activity, and built relationships with a number of new clients.  From all my experiences, I could see many clients like myself had been bombarded by other agencies on a weekly (or even daily) basis, as everyone was knocking on their door, seeking their business.

Collections is a big business, dealing with millions and millions of dollars, and affects a huge portion of the Canadian population, but it’s also a small business well – hundreds of collection agencies often compete closely for the same clients on a regular basis, and the management and sales personnel all know of each other.

Advice For The Credit Manager

So, for the beleaguered credit manager receiving call after call from different collection agencies, all looking for a shot at their business, I would recommend answering or returning your calls when the sales personnel come calling, and be prepared with the following questions.  This will help you weed out the sales calls from the honest companies that can help you as a creditor.

1.       Are you a licensed collection agency?  What provinces are you licensed in, and what are your license numbers?

You would be surprised to know how many so-called collection agencies operate without proper licensing.  Paralegal firms, collection consultants, and other one-man shows often attempt to perform third party collections without observing the collection laws in the various provinces.  You are always best to look into this and then research the collection agency online.  The site for searching for registrations in Ontario can be found at

2.       What is your title at the agency? If I were a client of your company, how would you be involved after files were assigned?

This will give you some real insight into the agency`s business structure.  Are you being solicited by a telemarketer, a member of the management team, or something in between?  This will give you an idea of how much they would value you as a client within their organization.

3.       Can you give me a list of client references that I can contact?

The small agencies, or those who treat their clients poorly will be weeded out by such a question.  It will also thwart the telemarketers and sales staff who are unprepared to deal with client relationships rather than a client for the sake of having a client. 

If you do receive a list of references, by all means call them!  It gives you a chance to connect with fellow credit managers, and learn what kind of service they receive.

4.       Do you have a sample contract or service agreement I can look over?

Now, you aren`t asking for an agreement to sign (and certainly don`t give that impression to the sales person just yet), but you are looking to see if the agency increases their rates arbitrarily based on aging of accounts, or if there are closure fees if a file is listed in error, or the agency feels a need to lock clients into an extended contract – these are all danger signs.

5.       Who would be handling my collection work?  Before considering your agency, would I be able to speak to them in person?

One of the best things I saw from a potential client was an on-site visit where the credit manager came in, and talked to the collection agents on the floor – not the sales people, not the management, but the actual people who do the actual representation of the client.  He turned to a collection officer who had been there a year without warning and asked "why do you work here?  What do you like about this company?"  Utter genius.

If a collection agency isn`t comfortable with you speaking to their staff, they may not have a positive work environment, or invest much time in training their staff or making them a part of the greater operation.

Controlling the Flood of Sales Calls

While you do want to examine your options and see if you can find a superior service for your company, you don`t want to feel under siege by the agencies.  To control the calls, return the answering machine messages and spend a couple of minutes asking pertinent questions.

If you think you are satisfied with your current collection agency, don’t be complacent, and keep an open eye to new options.  So many clients I`ve dealt with have worked with an existing agency for years, receiving sub-standard performance or customer support.

If the new collection agency sounds like a potential service provider, collect their information and ask if they will follow up with you in 30 or 60 days.  It gives you breathing room to consider their services on your time-table, and you can then see if they actually are organized and interested enough to call you back when you specify.

If you are happy with your current provider, or the company doesn`t display the skills or qualifications you are seeking, invite them to call back in six months to a year.  You will put an end to their calls (hopefully) for that period of time, and if they respect your position and your company, they will comply.  If they have the focus and commitment to follow up with you in the six months to a year, they may be worth considering down the road.


Credit managers and creditors are in the drivers seat when it comes to interviewing and selecting a collection agency – yet many are not sure how to deal with the frequent calls and the swift verbal patter of sales personnel.  The larger your company, the more likely you will be subject to the attention of third party agencies.  I recommend being prepared to meet these calls head on, and be prepared with some challenging questions.

If you are a creditor having issues with selecting a collection agency, I am always available to speak – I would encourage anyone who reads this and has questions to reach out and speak with me.  My office number at Kingston Data and Credit is 226-444-5695.

Blair DeMarco-Wettlaufer
Kingston Data and Credit –
Cambridge, Ontario

1 comment:

  1. Blair this is an excellent article particularly for those who are just getting into management. I can remember my first experience as a Credit Manager and how it seems as if all these reps knew and started circling like vultures. I have always made a point of visiting any agencies and get to know the collectors. Usually I will demand that only one specific collector handle my files and develop a relationship with that individual.