A high-risk business option depends on the risk involved; some businesses are at a higher risk than others and in the world of business, this can mean higher charges for services.
One of the businesses that are in the high-risk area is Collection Agencies, they are taking a risk in trying to claim back monies from companies or individuals that have defaulted on their payments. It is possible to secure a collection agency merchant account, they are essential if you are looking to retrieve payments for businesses.
However, it is important that you follow the rules and regulations in how you approach those people who are in default.
The U.S. Department of Education has let the companies collecting the defaulted student loans not follow the correct guidelines on how to collect overdue monies. They didn’t even ensure they were following the basic federal laws governing collection agencies. This resulted in a record number of complaints against the 22 collecting agencies.
What is more important to the citizens is the amount of money that is in defaulted payments; collection agencies are looking at reclaiming over $34 billion in 2013. However, the amount of money these collection agencies have collectively made in 2012 was $448 million, and bonuses of $8.3 million. The bonus payments are not public, yet many believe no adequate checking is in place to ensure bonuses are fair and deserved.
Many people believe the systems that are in place are inadequate to cope with the demands of student loans. The agencies collecting the money need to follow strict guidelines as to the way they approach those people who have defaulted on their loans. Menacing actions and tactics that are not legal are unacceptable and the Education Department needs to address the faults of the 22 collection agencies that it employs to collect defaulted student loans.
Therefore, if you are looking to enter the Collection Agency as a business, it is vital that you understand and follow the guidelines to ensure your business complies legally with all requirements.
To get started on the right terms, contact us for a collection agency merchant account today!