Jun 10, 2013 Philip Burgess
When companies are faced with closing delinquent accounts, many resist employing the services of a debt collection agency in favor of attempting to close debts in-house. However, some businesses find the debt relief process to be a difficult field to navigate. Simple missteps can result in hefty fines, civil suits and other penalties.
According to the West Virginia Record, this was the case recently for GE Capital Bank. The source reports that a West Virginia couple is suing the bank for illegal collection practices. In particular, the plaintiffs contend that that GE Capital Bank violated regulations outlined in the West Virginia Consumer Credit and Protection Act. Stipulations in the state's law prohibit the use of aggressive and annoying calling practices.
Ricky and Tracy Henderson, the couple that filed the lawsuit, allege that the bank continuously contacted the couple at unusual times with the intent to abuse them.
As VendorSeek notes, there are several advantages to outsourcing debt collection for businesses. One of the advantages of using such a service is that it allows in-house employees to focus on their primary job functions. Because most workers have other jobs to do, pursuing debtor accounts can often be neglected by teams that are tasked with collecting. This can be detrimental, as VendorSeek states that the longer a debt goes unpaid, the chances of never receiving a payment increase. Professional agencies are used to this dynamic and have sophisticated strategies in place to close accounts.
When seeking business loans, lenders often analyze company balance sheets. A firm that has a large amount of old receivables may be penalized by the lending outlet for their cash flow issues. Outsourcing collection to professionals can ensure that a company has as little uncollected debts as possible on the books.