If you are faced with huge amounts to be collected from debtors and are having a hard time doing it on your own, outsourcing the collection is a good business solution. Canada is a great outsourcing destination for collections due to its proximity to the United States. Canadians speak the same language, have a very knowledgeable workforce, their communication infrastructure is sound and their rates are lower compared to getting a collection agency within the United States.
- Find a reputable collection agency in Canada through the Better Business Bureau websites of each Canadian province, from directory listing and classified advertisements, in print and on the web.
- Make a list of probable agencies and get in touch with them. Discuss your requirements and ask them to submit their company profile and business information. Ask for client testimonies and referrals. Review their collection policy and their terms and service agreement. It can vary from province to province. The collection agreement will state, based on your discussion, the amount of commission they will charge you.
- Look for a collection agency that is specialized in the type of business that you are engaged in. This will be of great help to you since they will have the necessary background information and business knowledge for a more effective collection approach.
- Check if the collection agency that you are going to hire is bonded. This is very essential because of the monetary transactions involved. This is meant to protect you and the agency.
- Check how their debt collection process works and how the debt payment should be handled. The collection agency may collect full commission even if the debt was paid directly to you, as long as it was included in the list of debts they were assigned to collect. You have to send the collection agency a report on this direct payment. There is also a standard rate for late payments to the agency.
- Make sure that they are licensed to make debt collection representation for clients outside of Canada. You should also ensure that the collection agency fully complies with the Fair Debt Collection Act of the United States.
- When you sign up with a collection agency, you grant them the power of attorney to endorse money orders, postal notes and checks received by the collecting agency which are payable to you, according to the list that you have submitted to the agency for debt collection. The collection agency will only initiate legal action upon your directive.
- Check if the collection agency is capable of doing ‘skip tracing’. This is term used for those debtors who have skipped on an account and seemingly unable to be contacted by phone or by mail.
- Compare the rates, extent of service and the terms and conditions before you sign up and outsource your collections to Canada. Get a lawyer or financial advisor to review each proposal and collection agreement before making the final commitment.
Canada is an option where you can outsource your collections, but you still need to know all the rules, regulations and restrictions as well as legal ramifications that may apply and ensue as you are hiring a foreign collection agency operating in another country to collect debt payments from American nationals.