As the economy slumps, more consumers than ever are failing to pay their debts -which causes financial distress to the businesses that lent them money.
According to a recent article in Business Week, credit card issuers expect bad debt to reach an estimated $96 billion in 2009 – and that’s just on credit card debt.
Until recently, small businesses who hired collection agencies to recoup bad debt were forced to pay them a large percentage of any money recovered – but CDI, a commercial and consumer collection agency, has come up with a revolutionary new way to help small businesses who are struggling to collect money owed to them.
Most collection agencies charge a higher percentage, as high as 45 percent, for debts that are older than six months.
Most collection agencies, in fact, make more than half their money from debts that change rates over time. If a small business places an account with a debt that’s five months with most collection agencies, the agency can wait a month to collect on it – and then charge a higher commission because it is an older debt. CDI is the only company that, instead, offers its clients a flat rate of commission. “For years collection agencies claimed older debts are harder to collect so they can justify charging more commission. CDI is in business today because we take care of our clients and give rates no other company has dared to do,” according to Mark Remington, president of CDI. Word of CDI’s more affordable billing method is spreading quickly. “Every month we are getting two to five large multi million dollar clients placing business with us,” Remington said. “When you deal with companies this large the saving in commission costs can run in the 6 figures.”
The cost savings for small businesses seeking to collect bad debt can be tremendous. According to Curtis Smith, of the sales and marketing department, “Flat rates just take all the guess work out of commission rates. It’s simple, its easy and its straightforward. If we can save our clients money with better rates then I have done my job.
To find out more information about CDI, visit their site at www.controldatainc.com.