Are Collection Agencies Dinosaurs?
Client: Metal Wholesaler, VA
Debtor: Food Distributor, VA
Amount owed: $2,413
Case Study Summary: No dispute, client had signed credit application (no PG), Purchase Order, and delivery ticket on file. Debtor simply ignored all client emails and did not return phone calls. First collection agency was ignored just the same. Debtor told them “we don’t deal with collection agencies” and just hung up the phone. Second collection agency same thing. Debtor was savvy and figured the amount was too small to sue so client would just give up. Stevens & Ricci accepted the file, had a straight contingent Collection Attorney partner local to the debtor make one phone call and send an Attorney Demand Letter. Payment in full was received immediately without having to file suit and with no out-of-pocket costs to the client. Client paid a standard contingent fee. The debtor was just waiting for attorney pressure which most agencies are not set up for, especially for smaller balances like this one.
Conclusion: If a collection agency threatens to sue as a last resort, it is not usually taken seriously. If a Collection Attorney delivers a formal legal demand accompanied by a phone call, success is imminent. A contingent Collection Attorney model is far superior to the standard collection agency process for commercial accounts of any size in all 50 states.