It happens now and then – a creditor won’t have a good fit or set of results from a collection agency, and it’s time to wind things down and work with a new partner. However, disentangling from an agency that has spent months, if not years, working with you can create some logistics you need to cover before shaking hands and walking away.
Are You Sure It’s
Time To Say Goodbye?
Obviously, in the collections industry everyone is vying for
your business, and these competitors will be telling you to fire your existing
agency and give them a try – but should you?
Before ending a business relationship that’s got history, and
financially benefits your company’s bottom line, you should ask if the
liquidation you are getting is reasonable, is the commission rate you are being
offered realistic, and is a change good for your company’s interests at this
time?
If you are 100% sure that you could do better with a new
partner, move ahead – but if you have doubts, maybe it’s better to try a test
sampling with a new collection vendor, and try 100-1000 accounts to measure
recovery performance, as well as operational flow, communications, and consumer
complaints. And at the same time, you
can let your incumbent agency know you are testing a competitor, because you
have concerns or are measuring their performance.
To start off ending things, you should be as professional as
possible, and have an honest conversation with your existing agency, and let
them know you are moving on, but at the same time put it in writing and create
a paper trail. Make a clear set of end
dates for the following items below.
Stopping the Forward
Flow
Redirecting new accounts to a new vendor is pretty simple –
make sure the old agency and new agency know the switch date, and make sure it
honours your contract terms with both agencies.
If you are in an industry with multiple accounts for the
same consumer or consumer household, be prepared for some issues as consumers
are being contacted by more than one agency – have a plan in place to shut down
conflicting accounts on a case by case basis, or tell both agencies to redirect
these confused consumers directly to yourself.
Handling Existing
Inventory
Your old agency may have accumulated a significant inventory
of your files – you can mutually agree to close down the accounts wholesale, or
allow them to maintain a small number of pre-authorized payments or payment
arrangement files. Make sure you are
clear with a shut down date for all accounts, and get a report from the agency
showing the accounts as closed.
Also, if the agency is in possession of original data, you
may want them to return or destroy that data – to a point. The agency shouldn’t delete any record of the
debtor ever existing with them - keep in mind that consumers may call this
agency years later because of a credit bureau inquiry or a judgment and want to
deal with the account. Make sure you
leave the agency enough information to identify the account, and forward the
consumer back to you to deal with.
External
Entanglements
As you have given the files to your old agency, they in turn
may have reported these accounts to the credit bureau. Be clear with the agency with a deadline for
showing with the credit bureau these accounts are closed (it’s a special status
they can upload).
As well, if you have your company name on testimonial
sheets, the old agency’s website, or anything you might not be comfortable
with, make sure you politely ask those to be purged and give them a reasonable
amount of time to do that.
Ending Things Well
If you have been reasonable with your old agency, and
avoided information ambushes or emotional words, you can probably end things
well – and that’s a good thing. Your new
agency may not be the better option, or the key contacts you used to deal with
may move on to a new agency, or you will end up working at a new company and be
back to dealing with your old agency under a different brand – there’s fair
odds you will deal with some of these same folks in the future. The credit professionals’ world is small, and
odds are you will run into each other down the road, so make sure you can end
things like you began, with honesty and a hand shake. This leaves the door open for new
opportunities and changes in future.
Conclusion
From my agency’s internal perspective, we see a lot of
clients coming on struggle to end things well with old agencies. Some don’t know how to properly express their
dissatisfaction, and others don’t know what to ask or instruct their old agency
as is their right. Some agencies are bad
sports about letting a client go, even though no one is winning through the
partnership. So, if you are a credit
manager, and you want some insight into letting your collection agency go, and
you are having issues, feel free to give
me a call or email me.
Thanks kindly,
Blair DeMarco-Wettlaufer
KINGSTON Data & Credit
Brantford, Ontario
226-946-1730
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