Collection Agencies

Pros and Cons of Hiring an Outside Collection Agency

Pros:

• Hiring an OCA can allow staff to focus on other areas of the business.
• Staffing levels and costs can be contained while collection efforts are increased.
• Government staff can focus on customer service while the debt collector is the “bad guy.”
• Unloading uncollectible accounts to an agency can improve the government’s bad debt ratio.
• Remedies may favor in-house collections. 
  • Customer-centric tracking can allow government to withhold additional services or deny contracts to a delinquent customer.
  • Service terminations can prompt payment
  • Criminal penalties can be enforced

• Accounts can be collected based on internal priorities

Cons:

• Agency fees can be expensive in comparison to in-house costs.
• Taxpayers may balk at the involvement of collection agencies as they are perceived to be adversaries rather than customer friendly.
• Lack of control over accounts, service, quality.
• Reputation of agencies can make outsourcing a tough sell to taxpayers and governing bodies.
• Issues with revolving debt may be problematic.
• You’re not the agency’s only client so your debt may not be prioritized as highly as you’d like.