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When to Hire a Debt Collection Agency in Australia

A debt collection agency in Australia is a company that specialise in recovering unpaid debts on behalf of creditors. They work to locate and contact individuals or businesses who owe money and negotiate payment arrangements or settlements to recover the debt.

Debt collection agencies use a number of different methods to collect debts for a creditor, including:

  1. Making telephone calls and negotiating on the phone.
  2. Emailing and posting letters of demand to the debtor.
  3. Trying to get the debtor into a repayment plan (if they are unable to pay the debt); and
  4. Referring the dispute to debt collection lawyers if unsuccessful.

In order to collect a debt, the Australian debt collection agency must have all of the evidence it needs to prove that the debtor owes the debt to the creditor, and that the debt remains unpaid.

In this article, our Australian Debt Collectors will explain the process of collecting debts by a debt collection agency in Australia.

Table of Contents

Debt Collection Agency in Australia

Debt collectors are professional agents who specialise in the recovery of unpaid debts (such as unpaid invoices) and can often be successful in collecting debts that may be difficult for individuals or businesses to collect on their own.

If you have tried to collect a debt on your own and have been unable to do so, it may be time to think about hiring a debt collector in Australia.

When to Hire a Debt Collection Agency in Australia?

There are several situations in which it may be advisable to hire a debt collection agency:

  1. If you are unable to effectively recover a debt on your own
  2. If you are short on time or resources
  3. If you are not comfortable dealing with debtors directly
  4. If the debtor is unresponsive or unwilling to cooperate

If you are unable to effectively recover a debt on your own

Debt collection agencies specialise in recovering unpaid debts, and they may have resources and expertise that you don't have access to.

If you are short on time or resources

Debt collection can be time-consuming and resource-intensive, especially if you are trying to manage it alongside your other responsibilities. Hiring a debt collection agency can allow you to focus on your core business while the agency handles the debt recovery process.

If you are not comfortable dealing with debtors directly

Some people may find it difficult or stressful to communicate with debtors about unpaid debts. In these cases, a debt collection agency can act as a buffer, allowing you to avoid direct confrontation with the debtor.

If the debtor is unresponsive or unwilling to cooperate

Debt collection agencies often have strategies and techniques for persuading recalcitrant debtors to pay, such as using skip tracing or legal action.

Factors to consider when deciding whether to hire a debt collection agency in Australia

There are a number of factors to consider when deciding to hire a debt collection company, including:

  1. Is the collection agency insured?
  2. Does the agency employ trained professionals?
  3. What is the reputation of the collection agency?
  4. What services and tools are offered by the agency?
  5. Do they specialise in commercial debt collection?

At Advance Debt Collection we tick all of the boxes.  We are insured and licensed (Advance Debt Collection Pty Ltd hold authority number 4583821 to act as a debt collector).

We have 5 star reviews on Google and we specialise in commercial and business debts, with over 20 years of experience by our trained debt collection staff.

Advance debt collection offers debt collection, skip tracing, receivables management, and have a legal partnership with a commercial litigation and debt recovery law firm.

The benefits of using a debt collection agency in Australia

The benefits of using a debt collection agency are numerous and varied.  These reasons include:

  1. A debt collection agency will invest the time that you do not have to chase debts.
  2. Debt collectors in Australia have the expertise, know-how, and resources that you do not have.
  3. Because of the above, it is likely that our agents will collect debts more quickly, giving you the much-needed cashflow to your business.
  4. Debt collectors in Australia are polite and professional and may collect your debt without ruining your relationship with your client/customer.
  5. Debt collection services in Australia are provided on a no-collection, no-commission basis. This means that if we do not collect, we do not get paid.
  6. Our debt collection company has a strategic partnership with a litigation and debt recovery law firm.

These are just a few of the many varied and beneficial reasons why you should use a debt collection agency.

The costs and fees involved in hiring a debt collection agency in Australia

Debt collection service costs can vary. There are many factors that can affect the price, including:

  1. the size of the debt amount (commissions based upon debt size).
  2. whether you're working with a lawyer or a debt collection agency.

Debt collectors in Australia charge a percentage of the recovered debt (commission), with a higher rate for smaller debts, scaling down to a lower rate for larger debts.

If you are using debt recovery lawyers, then they usually charge an hourly rate which can range from $180 to $550, depending on their experience.

Prior to commencing any debt recovery action, Advance Debt Collection will disclose all the costs and commission percentages.

The importance of selecting a reputable and ethical debt collection agency in Australia

Selecting an ethical debt collection agency is essential because, as your agent, they reflect your business.

An unprofessional debt collection agency can damage your business reputation and make it more difficult to recover debts, as debtors may become resistant to paying after a negative interaction, even if they are able to do so. Read our article of Robodebt, unethical debt collection.

Look for a debt collection agency that:

  1. Has strong business ethics and a firm understanding of the local debt collection laws.
  2. Has a good online reputation, or at least nothing negative online.
  3. Has a history of maintaining business relationships.

To assist in selecting a reputable and ethical debt collection agency in Australia, you could:

  1. Ask questions – give us a call and speak to us.
  2. Look for accreditation - Advance Debt Collection Pty Ltd hold authority number 4583821 to act as a debt collector
  3. Read the reviews – read our online reviews and Google us to see if there is anything negative online.

It is important to do your due diligence.

Tips for working effectively with a debt collection agency in Australia

In our experience, there are a few things that our clients can do to make the process work effectively, these include:

  1. If the debt is disputed, be prepared to negotiate with your debtor.
  2. Communicate your desired outcome and your expectations to the agency.
  3. Understand, and consent to, our clear terms for payment of the commissions.
  4. Ensure that the lines of communication are kept open in case we need urgent instructions.
  5. Monitor the debt collection agency's progress in collecting your debt.
  6. Provide the debt collection agency with all relevant information and documents.

If you can do this, then you will have a great relationship with your Debt collection company in Australia.

Alternatives to using a debt collection agency in Australia

Alternatives to using a debt collection agency in Australia include:

  1. Seeking the assistance of a mediator or other form of ADR (adjudication for building debts, for example).
  2. Selling the debt to a third-party debt purchaser.
  3. Sending a letter of demand and negotiating a payment plan with the debtor yourself.
  4. Try making offers to incentivise the debtor into making a for payment (reduce amount for early payment, for example).
  5. Using a debt recovery lawyer to commence debt recovery action in Court.

However, if you need a debt collection agency that understands the debt collection process in Australia, then think about using Advance Debt Collection.

Why use Advance Debt Collection?

there are a number of reasons why advance debt collection are the best debt collection agency in Australia, including:

  1. Our highly trained debt collection team have a combined 25+ years’ experience in debt collection and legal debt recovery.
  2. We can collect any amount of debt, from $500 to $500,000 or more. There is no debt too big or small.
  3. We have a partnership with an expert commercial litigation, debt recovery, and insolvency law practice, so that they can offer you legal advice and assistance if required.
  4. We have a same-day service, which means that if you tick all the admin boxes, we will send the first letter out on the same day you engage us.
  5. We have an In-house investigations and skip tracing team, so that we can find your debtor in case they are trying to hide from you.
  6. We offer a no-collection, no-commission debt collection model, where if we do not collect your debt on a “no win, no fee” basis, then we do not get paid.
  7. We offer an obligation-free consultation, and you can instantly submit your debts online.
  8. You can upload a debt any time with our easy-to-use online debt submission tool, so you can upload your debts instantly online.
  9. You will be assigned your own personal debt accounts manager, and you will deal with them, and only them who will provide you with regular updates.

As you can see, Advance Debt Collection offers what all the other offer combined – in one place.

How to Choose the Right Debt Collection Agency for Your Business

As a small business owner in Australia, it's inevitable that you will come across customers who do not pay their debts at some time.

In these situations, you may need to seek the assistance of a professional debt collection agency to recover the outstanding amount.

However, not all debt collection agencies are created equal, there are a large number of business who claim to be a debt collection agency, and so choosing the right one can be a difficult task.

As outlined below, the following in relation to choosing the right debt collection agency for your business:

  1. Understand the types of debt collection agencies.
  2. Determine your needs.
  3. Check the agency's reputation.
  4. Verify licensing and certifications.
  5. Consider the agency's experience.
  6. Understand the fees and charges.
  7. Assess the agency's communication skills.
  8. Evaluate the collection process.
  9. Review the agency's customer service.
  10. Look for online reviews and ratings.
  11. Assess the agency's technology capabilities.
  12. Understand the agency's compliance standards.
  13. Evaluate the agency's litigation services.

Our experienced debt collectors will explain more in detail below.

Understand the Types of Debt Collection Agencies

Before you start looking for a debt collection agency, you should first understand the types of agencies available in the market.

A debt collection agency is a distinct entity employed by the creditor to recover debts on their behalf.

These companies may have more debt collection expertise and may use more aggressive debt collection tactics.

When selecting a debt collection agency for your company, it is critical to grasp the distinctions between what your own in-house debt collectors can do, and what a debt collection agency can do.

Determine Your Needs

The next step is to determine your needs.

You should consider factors such as the type of debt you need to collect, the amount of debt, and the age of the debt.

Different debt collection agencies have different specialisations, and you should choose one that meets your specific needs.  For example, some debt collectors specialise in one or more of the following:

  1. Building and construction debt collection.
  2. Educational institution debt collection.
  3. Financial institution debt collection.
  4. Government agency debt collection.
  5. Healthcare provider debt collection.
  6. Insurance company debt collection.
  7. Professional services debt collection.
  8. Property management debt collection.
  9. Retailers and e-commerce business debt collection.
  10. School and day care debt collection.
  11. Telecommunications company debt collection.
  12. Utility company debt collection.

Check the Agency’s Reputation

Reputation is everything in the debt collection industry.

You should research the collection agency's reputation by checking online reviews and ratings, speaking with other business owners, and checking the agency's Better Business Bureau rating.

Here are some ways to check a debt collection agency's reputation in Australia:

  1. Ask for references from current clients (if they agree).
  2. Check industry associations such as ACDBA.
  3. Check online reviews and ratings.
  4. Check with the Australian Competition and Consumer Commission (ACCC); and
  5. Check with the Australian Securities and Investments Commission (ASIC).

By following these steps, you can check a debt collection agency's reputation in Australia and make an informed decision about which agency to choose for your business.

Verify Licensing and Certifications

It's important to verify that the debt collection agency you choose is licensed and certified to operate in your state.

You can check the agency's licensing and certification status on your state's website.

Under the Agents Financial Administration Act 2014 Advance Debt Collection Pty Ltd hold authority number 4583821 to act as a debt collector.

Consider the Agency’s Experience

Experience matters in debt collection.

You should choose a debt collection agency that has experience in collecting the type of debt you need to recover.

At advance Debt Collection we have combined over 20 years of experience in the debt collection and legal debt recovery industries.

Additionally, the agency should have a proven track record of success.

Understand the Fees and Charges

Debt collection agencies charge different fees and charges for their services.

You should understand the fees and charges upfront to avoid any surprises.

Some agencies charge a percentage of the recovered amount, while others charge a flat fee.

At Advance Debt Collection, our commission rates are:

  1. $1,000 - $5,000 - 30%
  2. $5,000 - $20,000 - 25%
  3. $20,000 - $100,000 - 20%
  4. Over $100,000 - 15%

However, these are negotiable depending on your circumstances and the amount of debts.

Assess the Agency’s Communication Skills

The debt collection agency you choose should have excellent communication skills.

The agency should be able to communicate effectively with you and your customers.

Additionally, the agency should be able to provide you with regular updates on the collection process.

Having good communication skills is essential for a debt collector for several reasons:

  1. Avoiding legal issues with debtors.
  2. Building trust with debtors.
  3. Negotiating payment plans with debtors; and
  4. Resolving disputes with debtors more effectively.

Overall, having good communication skills is essential for a debt collector to communicate with debtors effectively and respectfully and successfully recover outstanding debts.

Evaluate the Collection Process

The collection process is critical in debt collection.

You should choose an agency that has a proven collection process that is both effective and ethical.

Effective evaluation of the debt collection process is important for debt collectors for several reasons:

  1. Improving customer satisfaction.
  2. Improving efficiency.
  3. Maintaining compliance.
  4. Maximising recovery; and
  5. Reducing costs.

For debt collectors to increase productivity, optimise recovery, cut expenses, maintain compliance, and boost client happiness, the debt collection process must be effectively evaluated.

Review the Agency’s Customer Service

Customer service is important in any business relationship.

You should choose a debt collection agency that provides excellent customer service.

The agency should be able to handle customer inquiries and complaints in a professional and timely manner.

Customer service is important in debt collection for several reasons:

  1. Adhering to laws, rules, and regulations.
  2. Building trust between all parties involved.
  3. Maintaining client relationships.
  4. Protecting the agency's reputation; and
  5. Resolving disputes.

In order to establish confidence, settle disagreements, uphold client relationships, safeguard the agency's image, and comply with regulations, excellent customer service is crucial in the debt collection industry.

Increased debt collection, repeat business, and recommendations may result from it.

Look for Online Reviews and Ratings

Online reviews and ratings can provide valuable insights into the agency's reputation and service quality.

You should check multiple sources for reviews, including Google, Yelp, and the agency's website.

Pay attention to both positive and negative reviews and look for any recurring themes.

Looking at a debt collection agency’s online reviews before engaging them is important for several reasons:

  1. Avoiding scams or fraud: Reading online reviews can also help to avoid scams or fraud.
  2. Quality of service: Reviews can also give an idea of the quality of service provided by a business.
  3. Reliability: Online reviews can also provide insight into how reliable a business is.
  4. Reputation: Online reviews can provide a snapshot of a business's reputation.
  5. Trustworthiness: Reviews can also provide an indication of how trustworthy a business is.

In general, reading internet evaluations of a company before working with them is crucial for determining their image, integrity, dependability, level of service, and avoiding deception or fraud.

It is a helpful instrument for selecting a company to work with in order to make educated choices.

Assess the Agency’s Technology Capabilities

Technology plays a significant role in debt collection.

You should choose an agency that uses the latest technology to manage the collection process.

This includes using automated tools to streamline the process and provide real-time updates.

Choosing a debt collector with strong technology capabilities is important for several reasons:

  1. Better tracking and reporting.
  2. Debt collection legislation compliance.
  3. More efficient debt collection.
  4. Improved customer experience; and
  5. Increased accuracy.

The efficiency and usefulness of debt collection efforts, as well as accuracy and reporting, customer satisfaction, and adherence to pertinent laws and regulations, can all be impacted by a debt collector's technological abilities.

The outcomes for both the debt collection and the customer can be improved by selecting a debt collector with cutting-edge technological capabilities.

Evaluate the Agency’s Litigation Services

In some cases, debt collection may require legal action.

You should choose an agency that has experience in litigation and can provide you with legal support if needed.

It is crucial to select a debt collection who offers legal services or has access to litigation services because it opens up a new door for debt recovery.

If a debtor refuses to cooperate with conventional collection efforts, legal action may be required to recoup the unpaid balance. If they have access to legal services, then the debt collectors may file a debt claim in Court on behalf of their customers.

Access to legal services may also discourage defaulting creditors. A debtor may be more willing to collaborate and resolve the debt if they are aware that the creditor has easy access to legal action.

We have a unique relationship with Stonegate Legal.

Debt Collection Agency in Sydney, New South Wales

As a creditor in Sydney, New South Wales, you have a number of options for collecting debts. The first step is to try to contact the debtor directly and discuss the debt with them. If you are unable to reach the debtor, or if they refuse to pay, you may need to engage a debt collector.

When choosing a debt collection agency in Sydney, it is important to select a reputable company that is licensed and insured. You should also check to see if the collector is a member of any industry associations.

Debt collectors are bound by the law and must not harass or bully debtors. They are also not allowed to make false or misleading statements. If you believe that a debt collector is behaving improperly, you can complain to ASIC or the ACCC.

If the debt collector is unable to recover the debt, you may need to take legal action. This can be a costly and time-consuming process, so it is important to weigh up the pros and cons carefully before proceeding.

Debt Collection Agency in Melbourne, Victoria

The debt collection process in Melbourne, Victoria is similar to that in Sydney. However, there are a few key differences.

Victoria has a number of consumer protection laws that are specifically designed to protect debtors.

For example, debt collectors in Victoria are not allowed to contact debtors outside of certain hours, and they must not contact debtors at work if the debtor has objected to this.

When choosing a debt collection agency in Melbourne, it is important to select a reputable company that is licensed and insured.

Debt Collection Agency in Brisbane, Queensland

The debt collection process in Brisbane, Queensland is also similar to that in Sydney and Melbourne. However, there are a few additional things to keep in mind.

For example, Queensland has a number of special rules that apply to certain types of debts, such as student loans and credit card debt.

In addition, Queensland has a number of consumer protection laws that are designed to protect vulnerable debtors, such as debtors who are experiencing financial hardship.

Debt Collection Agency in Adelaide, South Australia

The debt collection process in Adelaide, South Australia is similar to that in other Australian capital cities. However, there are a few key differences.

South Australia has a number of consumer protection laws that are specifically designed to protect debtors from unfair debt collection practices.

Debt Collection Agency in Perth, Western Australia

The debt collection process in Perth, Western Australia is similar to that in other Australian capital cities. However, there are a few key differences.

For example, the limitation period for debts in Western Australia is six years, compared to three years in the Northern Territory.

In addition, Western Australia has a number of consumer protection laws that are specifically designed to protect debtors from unfair debt collection practices.

Debt Collection Agency in Hobart, Tasmania

The debt collection process in Hobart, Tasmania is similar to that in other Australian capital cities. However, there are a few key differences.

Tasmania has a number of consumer protection laws that are specifically designed to protect debtors from unfair debt collection practices.

Debt Collection Agency in Canberra, Australian Capital Territory

The debt collection process in Canberra, the Australian Capital Territory (ACT), is similar to that in other Australian capital cities. However, there are a few key differences.

ACT has a number of consumer protection laws that are specifically designed to protect debtors from unfair debt collection practices.

Debt Collection Agency in Darwin, Northern Territory

The debt collection process in Darwin, the Northern Territory, is similar to that in other Australian capital cities. However, there are a few key differences.

For example, the limitation period for debts in the Northern Territory is three years, compared to six years in some other states and territories.

In addition, the Northern Territory has a number of consumer protection laws that are specifically designed to protect debtors from unfair debt collection practices.

Debt Collection Agency in Sunshine Coast, Queensland

The debt collection process in the Sunshine Coast, Queensland is the same as that in other parts of Queensland.

This means that the limitation period for debts is six years, and there are a number of consumer protection laws in place to protect debtors from unfair debt collection practices.

Choosing the Right Debt Collection Agency - Key Takeaways

Choosing the right debt collection agency is critical for the success of your business.

You should take the time to research different agencies and consider factors such as reputation, experience, fees, and technology capabilities.

By following the steps outlined in this article, you can choose an agency that meets your specific needs and helps you recover outstanding debts.

Australia Debt Collection Agency FAQ

Here are some common questions that people have about debt collection agencies:

How much does it cost to send someone to collections in Australia?

The cost of sending someone to debt collections in Australia will vary depending on the agency or company you use and the amount of your debt.

Some agencies charge a flat fee for debt collection (for example per letter of demand), while others may charge a commission of the amount recovered on a no collection, no commission basis.

Additionally, some agencies may charge additional fees for certain services, such as sending letters, skip tracing, or making phone calls.

Is it good to pay a debt collection agency?

Whether or not it is "good" to pay a debt collection agency in Australia will depend on your individual financial situation and the specific details of your case.

Generally, it is a good idea to pay a debt collection agency if you are able to pay off the debt and the agency is able to help you do so in a reasonable amount of time.  Otherwise, this file could be referred to lawyers, and you will start incurring legal costs.

Working with a reputable debt collection agency like Advance Debt Collection, may provide you access to experienced debt collectors and they can also negotiate with the creditors on your behalf.

Can I hire someone in Australia to collect a debt?

Yes, you can hire a debt collection agency in Australia to help you collect an outstanding debt from one of your aged receivables.

Debt collection agencies like Advance Debt Collection are professionals who specialise in collecting unpaid business debts.

Debt collectors in Australia utilise a number of methods to collect the debt from a debtor, including sending letters of demand and making phone calls, and they may also refer this debt for legal action if necessary.

What areas in Queensland are your services available?

Advance Debt Collection service, the whole of Queensland, and we collect debts Australia-wide.  We collect all amounts of debt, in all jurisdictions.

Do you recover debt for small businesses?

Yes, we do recover small debts for a small business, in fact business debts are what we specialise in.

We are able to help you recover ant business or commercial debt by sending letters, making phone calls, and referring to our legal partners for legal action if necessary.

What businesses do you recover debt for in Australia?

Advance Debt Collection can recover all kinds of business and commercial debts in Australia, including from the following:

  1. Financial institutions.
  2. Healthcare providers.
  3. Building and construction businesses.
  4. Retail businesses.
  5. Service businesses
  6. Utility companies

Do I need to hire a debt collection agency even if my debt is not that old?

If the debt is not that old and the debtor is likely to pay soon, it may not be necessary to hire a debt collection agency.  It may be more cost-effective to handle the collection process yourself by sending reminders and making phone calls.

However, if the debtor is not responding to your attempts to collect the debt and you do not expect them to pay soon, hiring a debt collection agency may be a good option.  You will know from your dealing with this debtor if they are going to pay or not.

What is a debt collection agency?

A business that specialises in collecting debts on behalf of debtors is referred to as a debt collection agency.

These organisations are employed by companies or people who are due money by debtors, and their main objective is to collect the unpaid debt.

How does a debt collection agency work?

In order to try and collect the unpaid debt, debt collection companies approach debtors in various ways.

To collect the debt or unpaid invoice, they may employ a variety of strategies, including phone calls, emails, and even legal action.

The creditor usually pays the fee or commission that debt collection companies charge for their services.

How much does a debt collection agency charge?

Depending on the company and the kind of debt being collected, debt collection costs can differ greatly.

While some organisations may bill a fixed fee, others might bill a portion of the money they retrieve on a commission basis.

It's critical to go over costs up front with the service to prevent any unpleasant surprises.

What should I look for in a debt collection agency?

It's crucial to take into account aspects like a debt collection agency's image, expertise, communication abilities, technological prowess, and litigation services when making your decision.

It's crucial to confirm that the organisation adheres to all applicable laws and rules regarding debt recovery.

The agency's costs and commission rates should also be examined to make sure they are fair and open.

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