However, another critical decision that needs to be considered when choosing which third party profit recovery company to hire is whether it has a creditor hold-harmless contractual clause to protect and isolate you, the creditor, from liability resulting from their actions coupled with an umbrella insurance policy against any third party violations of law!
The first key criteria that must be used in order to make the decision is whether the third party has a "hold-harmless" clause in its contract with you, the creditor. This is very important to minimize your risk as a creditor since in many cases the hirer of the third party is liable for illegal collection practices by the hired agency or company per the federal FDCPA (Fair Debt and Collections Practice Act).
The profit recovery company should be able to point out the exact clause on the contract where they are isolating you from any legal mistakes their employees might make in complying with federal, state, or local laws. While there are many reputable third party collection agencies, debt recovery companies, and profit recovery companies who make every attempt to follow the "letter of the law," there are some which are not compliant. Even the best in the industry might have only one employee who fails to follow procedure even if as an isolated event. The most likely phase in the collection or recovery process to have this risk is in the verbal demand phase when phone calls are being made from the third party to the debtor. This is why a contractual "hold harmless" clause is a must!
The second key criteria that must be used in order to make the decision is whether the third party is insured. Once again, this is very important to minimize your risk as a creditor since in many cases the hirer of the third party is liable for illegal collection practices by the hired agency or company per the federal FDCPA (Fair Debt and Collections Practice Act).
The profit recovery company should be able to display to you a valid in-force policy for an umbrella insurance coverage with a face value of at least US$1,000,000 dollars per incident and US$20,000,000 dollars cumulative. This protects you from an attempted lawsuit if the debtor sues the third party, even if they have a "hold-harmless" clause, and they can not pay due to a lack of funds.
Make sure you, the creditor, are contractually and financially isolated from liability from unlawful third party practices!
To inquire about how you can minimize your risk with a profit recovery company that has a hold-harmless contractual clause and a multi-million dollar umbrella insurance, while at the same time benefiting from the flat @$10 fee profit recovery service that has an average 56% recovery rate in 40 days for accounts turned over before they exceed 90 days late,
call us at
818-710-0244.
Series: "Recover Your Business Profits"
Article: #4 "Make Sure Your Collection Agency Isolates You from Liabilities Due to Their Errors"
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