There are no federal laws that state an agency must be licensed, registered or bonded to work on past-due accounts. However, several states have laws that require an agency to licensed and/or bonded in order to collect in that specific state. The requirements for licensing and bonding vary from state to state. Some states require a third party agency to be both licensed and bonded to try and collect on outstanding accounts. Other states require the agency to be licensed or bonded. And some do not require any type of licensing or bonding. Both collection agencies and businesses that work with a third party agency on their past-due accounts should be familiar with and understand the requirements and laws for the state they are trying to collect in. They should also know those laws for the state the agency is located in and the state the business resides in. The agency should be properly licensed and bonded in the state you are located in as well as the state the debtor resides in.
Due to the varying state collection laws, many agencies find themselves in violations of the state laws when trying to recover out-of-state debts because they were unaware of the licensing requirements. When an agency violates the law they can face several penalties. If they are found in violation, the debt they were trying to collect will be void. They can create legal liability and face expensive fines. A lot of the agencies provide national collection services in the U.S. These agencies must be aware of all of the different collection laws throughout the states. In addition to state licensing and bonding laws, most states have other state collection laws besides the federal laws. Some of these laws include bad check laws, state collection requirements, statute of limitations for debts and judgments and wage garnishments.
National Asset Management is one such agency who have licensed for international and national attorney-base collect. They understand how to manage receivables and help liquidate your receivables.
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Before hiring an agency to work on your past-due accounts do your research. Working with a professional, reputable agency that is properly licensed and bonded and follows all of the state and federal collection laws can help with your accounts receivable problems. The collection agency can help to reduce bad debt, lower costs and increase cash flow.
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