helen33 Posted April 26, 2005 Report Posted April 26, 2005 Hi , I live in Houston and I am thinking of starting a collection agency here after working in collection and accounting for a while now. What are the essential steps that I should take? Please I need advice. Do I consult a lawyer? I actually have a full time job for an accounting firm and my intention is to start gradually from home before expanding and may be working for my self. What are my chances of success ?There seem to be a lot of books out there for starting a collection agency. Do they help? Please advice
DocPC Posted April 26, 2005 Report Posted April 26, 2005 I think maybe you meant to post here: www.collectionindustry.com
miracle Posted April 26, 2005 Report Posted April 26, 2005 By best advice to you is not to do it. But... then again, I don't have the best opinion of CA as they don't like to follow those little pesky things called laws. If you decide to do it, be honest, fair and LEGAL. Follow the letter of the law. That may make you the most successful CA ever!
helen33 Posted April 26, 2005 Author Report Posted April 26, 2005 Hi Doc Pc, I went to the website and found this error messageError Occurred While Processing RequestError Diagnostic InformationAn error occurred while attempting to establish a connection to the service.The most likely cause of this problem is that the service is not currently running. You can use the 'Services' Control Panel to verify that the service is running and to restart it if necessary. Windows NT error number 2 occurred.
jojo67 Posted April 26, 2005 Report Posted April 26, 2005 By best advice to you is not to do it. But... then again, I don't have the best opinion of CA as they don't like to follow those little pesky things called laws. If you decide to do it, be honest, fair and LEGAL. Follow the letter of the law. That may make you the most successful CA ever!I would have to agree with Miracle here.... most all of the collection agencies don't follow the laws set forth for them to properly do there job. You are cetrainly asking the wrong group of folks here though, we have all been behind the eight ball with collections, some that weren't valid and some that were. I personally think it takes quite a person to realize there mistakes in 7 years. I mean really, one small minor thing and bam, labeled scum for 7 - 10 years, if you are lucky and don't get jdb coming out of the woodwork long after the original reporting.
workinninetofive Posted April 27, 2005 Report Posted April 27, 2005 I think you need a lawyer working for you (or be a lawyer) to be able to do this legally. Or be HIGHLY educated on the laws.. CA's get sued all the time for not following the law. I wouldn't give up a full time job.
gdouglaslee Posted April 27, 2005 Report Posted April 27, 2005 Hi , I live in Houston and I am thinking of starting a collection agency here after working in collection and accounting for a while now. What are the essential steps that I should take? Please I need advice. Do I consult a lawyer? I actually have a full time job for an accounting firm and my intention is to start gradually from home before expanding and may be working for my self. What are my chances of success ?There seem to be a lot of books out there for starting a collection agency. Do they help? Please adviceI don't think you would be very successful. Work on your spelling. But, it's your dime. Take a job as a part-time debt collector with someone else for at least 6 months. If you do that, you'll get a little training, a chance to collect both consumer and commercial debt, you can look at the operations aspect and you can see if you will like it and if you will be successful. If you can't collect debts for someone else, then you probably couldn't do it on your own and if you don't like it, then there's no reason to do it. If you decide you like it and are successful, you have to decide whether to concentrate on commerical or consumer debt. Call around to look for seminars on how to collect debt. They're usually sponsored by law firms. It'll cost you a couple of G's for a 2-3 day seminar, but it's worth it. Then write a business plan. If you can't write a business plan, you'll probably fail. You'll have to choose a Corp, S-Corp, LLC or LLP. As a sole proprietorship or general partnership, the liability is too great. Call around ask about the cost of errors & omission insurance and bonding (required in Texas). You'll need a stand-alone computer for business only and a toll free telephone set-up. Look into software programs for debt collection, letter/mail merge printing and taxes. From the seminar, you should have some good ideas for collection notices. Plan your collection strategy and hire an attorney to reveiw your collection notices to be sure the are in compliance with TX state law and the FDCPA. The seminars usually also cover FCRA reporting so you can be in compliance with the FCRA. At first, that shouldn't be a problem because you won't be able to report unless you have a large number of accounts, and you'll have to be profitable enough to pay the fees to the credit bureaus for the privilege of reporting.If you decide on consumer debt, for starters, you might want to contact local merchants and start by collecting on bad checks, or buying charged off accounts from local electronics or furniture stores (forget the national chains) and doctor's offices. If you do well enough, you can surf the web for debt auctions and work your way up.
Champion80 Posted April 27, 2005 Report Posted April 27, 2005 I on the other hand believe you should do it, then once you are done being licensed, come here and find out everyones collections and who is collecting. Everyone here that is willing to pay some of the debt to get a delete will then just pay you a profit over what you bought the debt for and everyone is happy.Of course this is possible because when a CA is sick of someones non-responisive a$$, they will sell it to someone else. Then it starts all over with the letters and the reporting to the CRA's. So you buy the debt so they cannot report anymore, then you give yourself a little profit over the pennies on the dollar you pay, and we pay the bill. And the debt and collection gos floating into space. After I met everyone here and started infiltrating the collections industry forum, I thought that would be a great idea and wanted to do it myself. Think about it, you call up someone on a debt a couple years old, they cant get anywhere, you offer a little more than they would get if they waited out and sold it out of tiredness. They say hey, why not, everything is processed, they can no longer report. We pay for a good settlement on the debt, you get paid. WE ARE ALL HAPPY...I THINK..WAIT A MINUTE..I have to get back to you.. I think I may be going crazy..
Ahntara Posted April 27, 2005 Report Posted April 27, 2005 I agree with Champion80. You could make a fortune by being one of the very few collection agencies willing to cooperate with debtors to improve their credit. Most CA's balk completely at the idea of PFD and most informed consumers refuse to pay money to someone who is ruining their credit. If you did open an agency that worked toward resolving debts to the betterment of both sides, now that would be just revolutionary.You'd probably get drummed out of the industry. Then again, what do I know?
DocDon Posted April 27, 2005 Report Posted April 27, 2005 Most anyone balks at PFD.... the CRA's are threatening companies with cancellation if they make such "agreements".The CRA's in turn are being pressured by creditors who use their services to determine risk.Basically, the CRA's are nothing but whores in the equation....
mike111 Posted April 28, 2005 Report Posted April 28, 2005 why would you ask that question here, we can tell you how to deal with CA, not starting one.CA's are like legalized bullies, why would anyone like to start one??
Champion80 Posted April 29, 2005 Report Posted April 29, 2005 Hello MIKE, I would be a legalized charity orgranization if I was a CA, after seeing so many people on the forum with CA problems, I think quite a bit of people would love the choice to call me and say hello Jason, and I say, great news you know your $800 balance on your 2 year old collection, I bought it, I can get rid of it for $260 and make sure it is never reported again. Hey DOC, when you say threating with cancellation what do you mean?? What would a CRA be able to cancel from a CA. Because if a CA sells a debt and no longer tries to collect they cannot report the debt as being collected by them right? So lets say me for example, purchases the debt and just does not report it, and I talk to you lets say, and I tell you I bought it, and you pay me a little profit on the amount and it is gone. I know there is a lot of hoops that I am sure must be jumped through to get things like this done, but I am in sales, and in reality if your efforts were pointed to the correct people that will result in such a circumstance would probably succeed more than fail.. But of course these are just random thoughts and nothing more.
Methuss Posted April 29, 2005 Report Posted April 29, 2005 Being able to report and pull reports is a "membership" with the CRAs. Basically if a CRA catches a member doing PFD they cancel that company's ability to access the CRA systems...no pulls and no reporting.The CRAs look at PFD as fraudulent reporting. But one way to handle it is to agree to ignore a CRAs request to verify on a consumer dispute. The CA isn't reporting anything false, they are just letting it slide past the statutory requirement.
Champion80 Posted April 29, 2005 Report Posted April 29, 2005 Good call Methuss!! I like it. Well who wants to go in on a partnership and start helping people out, I will start cold calling and buying the debts You had also said you get no pulls or reporting, the cool thing about that is, we will not be reporting or pulling, because we would be buying debts of people that have already agreed to pay us if we successfully buy their debt. Now if they then back out on us...that would be lack of integrity..But I would say we are close to 100% of integrity here right EVERYONE!! 8)
Xanathos Posted April 29, 2005 Report Posted April 29, 2005 Well, I've dealt with more CA's than most...I'm yet to meet an honest one (course in my case, even the ones that tried to follow the letter of the law were breaking it simply because of the ID theft issue that caused it)...so I can't say as if I'd recommend anybody starting another one. There already seems to be an endless supply of the damn things out there. Doesn't seem like an industry to try and get into...but then again what do I know; collection agencies worked in reverse order with me with regards to which direction the money flowed.
willingtocope Posted April 29, 2005 Report Posted April 29, 2005 The problem with being a "robin hood" debt collector, who buys debts and only collects enough to stay in business and then does the PFD is...that's only part of the problem. You've still got the OC's TL saying "Charge Off" on your credit reports. Ding...ding...And the OC sends you a 1099 reflecting the difference between their inflated balance and whatever Robin Hood paid for it...so then you've got the IRS to deal with.Just isn't any good reason to pay a JDB...there's a bad reason...avoiding a judgement...but that's another matter...
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