When dealing with overdue payments from media buyers, it is crucial to have a well-structured recovery system and collection process in place. This article will outline the three-phase Recovery System and the Collection Process to help companies effectively recover funds from delinquent debtors. By understanding these strategies, media buyers can navigate the process with confidence and improve their chances of successful debt recovery.
Key Takeaways
- Implement a three-phase Recovery System for efficient debt recovery.
- Utilize skip-tracing and investigation to obtain the best financial and contact information on debtors.
- Consider legal action as a last resort and understand the costs and implications involved.
- Understand the competitive collection rates and tailor them based on the number and age of claims submitted.
- Maintain clear communication with affiliated attorneys and make informed decisions regarding legal action.
Recovery System Overview
Phase One
The initial phase of the Recovery System is critical for setting the tone of the collection process. Within 24 hours of an account being placed, a series of actions are initiated to ensure a swift response. The debtor receives the first of four letters via US Mail, which serves as an official notice and a prompt for payment. Concurrently, the debtor’s information undergoes skip-tracing and investigation to gather the most accurate financial and contact details.
Our collector engages with the debtor through various communication channels, including phone calls, emails, text messages, and faxes, aiming to secure a resolution. Persistent daily attempts are made during the first 30 to 60 days to reach an amicable settlement.
If these efforts do not yield a resolution, the case transitions to Phase Two, where it is escalated to one of our affiliated attorneys within the debtor’s jurisdiction. This marks the end of the initial phase and the beginning of a more assertive legal approach.
Phase Two
Upon escalation to Phase Two, the case is transferred to a local attorney within our network. This marks a significant shift in the recovery process, as the attorney’s involvement adds a layer of seriousness to the debtor’s perception of the situation. The attorney will promptly send a series of demand letters on their official letterhead, which often prompts a more urgent response from the debtor.
The attorney’s office will also begin persistent attempts to contact the debtor by phone. These efforts are designed to establish direct communication and negotiate payment. If these intensified efforts do not yield a resolution, a detailed report outlining the challenges encountered and recommendations for further action will be provided to the client.
It is crucial at this stage to maintain open communication with the attorney to ensure that all possible avenues for recovery are being explored.
Should Phase Two prove unsuccessful, the next step would be to consider the recommendations for Phase Three, which may include litigation or case closure based on the likelihood of recovery.
Phase Three
Upon reaching Phase Three of the Recovery System, a critical evaluation of the debtor’s financial situation and assets is conducted. If the likelihood of recovery is deemed low, our firm may advise case closure, incurring no cost to you. However, should litigation be recommended and you choose to proceed, upfront legal costs will apply. These costs typically range from $600 to $700, depending on the jurisdiction.
Litigation is a significant step that requires careful consideration. Should you opt for legal action, the associated fees are necessary to initiate court proceedings. The table below outlines the potential upfront costs:
| Jurisdiction | Estimated Upfront Legal Costs |
|---|---|
| Standard | $600 – $700 |
In the event that litigation does not result in successful recovery, rest assured that you will not be responsible for any further payments to our firm or the affiliated attorney.
Our fee structure is designed to align with the success of the collection effort. The rates vary depending on the age of the account, the amount owed, and the number of claims. For instance, accounts under one year in age are subject to a 30% fee for 1-9 claims, while the same accounts would incur a 27% fee for 10 or more claims. It is important to note that accounts placed with an attorney consistently carry a 50% fee, reflecting the increased complexity and effort required.
Collection Process
Initial Contact
The initial contact phase is critical in setting the tone for the collection process. Prompt communication is essential, as it demonstrates the urgency of the matter to the media buyer. During this phase, collectors should employ a variety of contact methods, including phone calls, emails, text messages, and faxes, to ensure the message is received. It’s important to maintain a professional demeanor, as the goal is to secure payment while preserving the business relationship.
Persistence is key in this stage, with collectors expected to make daily attempts to reach the debtor for the first 30 to 60 days. If these efforts do not yield a resolution, the case will escalate to the next phase of the recovery system.
The initial contact phase is not just about demanding payment; it’s about opening a dialogue and understanding the debtor’s situation to find a mutually acceptable resolution.
Here is a summary of the actions taken within 24 hours of placing an account:
- The first of four letters is sent to the debtor via US Mail.
- Skip-tracing and investigation to obtain the best financial and contact information.
- Daily attempts to contact the debtor using all available communication channels.
Legal Action
When the decision to proceed with legal action is made, it signifies a critical juncture in the collection process. The initiation of legal proceedings requires careful consideration due to the associated costs and implications. Should you opt for litigation, you will be responsible for upfront legal expenses, which typically include court costs and filing fees. These fees generally range between $600 and $700, depending on the jurisdiction of the debtor.
Upon payment of these fees, our affiliated attorney will commence a lawsuit to recover all monies owed, including the costs incurred to file the action. It is important to note that if litigation efforts are unsuccessful, the case will be closed, and you will not owe any additional fees to our firm or the affiliated attorney.
The following table outlines the rates for our services based on the number of claims and other factors:
| Number of Claims | Account Age | Rate (% of amount collected) |
|---|---|---|
| 1-9 | Under 1 year | 30% |
| 1-9 | Over 1 year | 40% |
| 1-9 | Under $1000 | 50% |
| 10+ | Under 1 year | 27% |
| 10+ | Over 1 year | 35% |
| 10+ | Under $1000 | 40% |
It is essential to weigh the potential outcomes and costs before moving forward with legal proceedings. Our team is available to guide you through this process and help you make an informed decision.
Rates and Fees
After the initial contact and potential legal action, it’s crucial to understand the rates and fees associated with collecting overdue payments from media buyers. Our rates are competitive and tailored to the volume and age of the claims. For instance, accounts under one year in age are subject to a 30% fee of the amount collected if there are fewer than ten claims. This rate decreases to 27% for ten or more claims.
DCI provides a structured fee schedule based on the number of claims and their age. Below is a summary table for quick reference:
| Number of Claims | Account Age | Fee Percentage |
|---|---|---|
| 1-9 | < 1 year | 30% |
| 1-9 | > 1 year | 40% |
| 10+ | < 1 year | 27% |
| 10+ | > 1 year | 35% |
It’s important to note that accounts under $1000.00 or those placed with an attorney are subject to a 50% fee, regardless of the number of claims. These fees are essential for covering the costs of collection efforts and legal proceedings when necessary.
In the event of unsuccessful litigation, clients are reassured that they will owe nothing to our firm or our affiliated attorney. This contingency-based approach aligns our interests with those of our clients, ensuring that we are motivated to collect the overdue payments effectively.
Frequently Asked Questions
What is the recovery system overview?
The recovery system overview consists of three phases. Phase One involves sending letters to debtors, skip-tracing, and attempting to contact the debtor for resolution. Phase Two includes forwarding the case to an affiliated attorney for legal action. Phase Three involves recommendations for closure or litigation.
What is the collection process?
The collection process includes initial contact with debtors, legal action through affiliated attorneys, and the application of rates and fees based on the age and amount of the accounts.
How long does Phase One last?
Phase One lasts for the first 30 to 60 days, during which daily attempts are made to contact the debtors for resolution.
What happens in Phase Two?
In Phase Two, the case is immediately forwarded to an affiliated attorney, who will draft letters to the debtor and start attempting to contact the debtor for resolution.
What are the options in Phase Three?
In Phase Three, the options include recommending closure of the case if recovery is not likely, or proceeding with legal action, which requires payment of upfront legal costs.
What are the collection rates?
The collection rates depend on the number of claims submitted and the age and amount of the accounts. Rates range from 27% to 50% of the amount collected.
