Debt Collection Agency UK Services

By Lucy Crossfield | Editor | Updated: 13 February 2019

It is a regrettable fact of business life that it can sometimes be extremely difficult to obtain settlement of monies that are owed to you.

There may be many reasons why you find yourself in such a position and therefore need to consider turning to collection agencies for assistance.

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The benefits of debt collection agencies for your UK business

No business, whether large or small, can afford to ignore customers who are not paying their bills.

The effects of this on an organisation can be severe:

  • firstly there is the obvious issue of cash flow because if you are struggling to obtain payment from your customers than that in turn may be directly and negatively affecting your ability to pay your suppliers and others around you;
  • then there is the question of management overhead. Unpaid bills are sometimes referred to as receivables and the effort of trying to manage the recovery of sums sitting on your receivables ledger can be significant. Phone calls, letters and occasionally perhaps moving to a legal action, can all be exceptionally time consuming;
  • finally, there is the sometimes under-estimated psychological effect of the stresses involved in confrontational discussions with people who owe you money.

Although there are a number of business techniques you can apply in order to try and reduce the number of slow or non-paying clients, in reality you may have to accept that a certain percentage of your customers are likely to occasionally be difficult to recover money from.

In such a situation, you may be faced with a choice of either trying to recover the monies yourself or hiring a specialist organisation to do so for you. These specialists are often referred to as collection agencies or sometimes debt collection agencies.

If this sounds to have certain underworld-type connotations, today nothing could be further from the truth. Collection agencies must be licensed and regulated – and their activities are strictly defined and controlled.

What they may be able to provide your organisation with is:

  • effectively, the outsourcing of your credit control department meaning that they would take over responsibility for obtaining payment from all of your customers who had not paid within a specified time;
  • in other cases, they may simply take on what are occasionally called significantly aged accounts – in other words, those hopefully few people who are simply not paying you at all;
  • take all the legal steps necessary to pursue the individuals concerned for the due payment including, if necessary, taking action through the courts to progress matters;
  • remove from you, all the unpleasantness that can be involved in writing chasing letters and making difficult phone calls;
  • undertaking traces to find people that have disappeared when owing you money.

It is typically the case that collection agencies may be able to recover sums of money that you yourself may have started to mentally write-off is a potentially unrecoverable debt.

Prices and rates

There are significant variations in the fees charged between agencies.

Some may charge a flat fee of somewhere between 4 and 12 per cent of any monies recovered. Others may charge a percentage that will vary depending upon the amount of money recovered when measured against the total debt.

Some may charge additional fees for complicated and extensive tracing activities etc.

The amount you end up paying for their services may depend upon your individual situation and requirements but might operate on the basis of you paying nothing unless they are able to secure at least some of your outstanding debt for you. It might be difficult to see how you can lose, if that is the nature of the financial arrangement.

However, do note that some fees are only dependent upon recoveries in situations where the agency is not asked to take legal (or some others) actions on your behalf. If court action is required, you may incur some costs irrespective of the outcome.

Make sure you have studied this carefully on the supplier’s proposition as it is a complex area.

How to choose the best debt collection agency

Typically, you may be looking for:

  • an organisation that is formally licensed by the Office of Fair Trading;
  • a company with a considerable track record over time and with some case studies and examples to illustrate their past successes;
  • one that offers an attractive tariff with particular emphasis on you not needing to pay anything if they are unable to obtain full or partial debt settlement on your behalf.

Inevitably, there may be a large number of potential candidate providers to choose from. It is important that you select one that is appropriate for your particular requirements and circumstances.

If you find the thought of reading through lots of internet advertisements to be something of an unpleasant chore, then that is where we can offer you immediate assistance.

Collection agencies in the UK

Just a brief sample of the companies that you might need to consider would include:

  • Gemini Debt Recovery – a company that has operated since the year 2000 and which offers a no win no fee arrangement;
  • Jack Russell Collections Agency – an organisation with origins going back into the 1980s;
  • Credit Collections (UK) Ltd – an agency with over 20 years’ experience and which offers some useful up-front guidance;
  • Debt Recoveries UK – a company that offers a choice of no win no fee or fixed price tariffs.

Next steps

If you are struggling to recover monies due to you and this is causing you stress and real financial hardship, it might make sense to consider the services of a collection agency. Yet perhaps you feel a little inhibited because you don’t really understand how to choose between suppliers or perhaps you simply don’t have the time.

If so, then why not let us help?

It would take only a few minutes of your time but it may be something that leads to you starting to recover some of that money you are due.

Lucy Crossfield Editor

Lucy heads up the team on Expert Market, helping to deliver industry-leading expertise on business topics for nearly four years.

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