$350 million in bad checks are written every single week. That fact alone makes bad checks a good problem for American businesses. It's almost inevitable that, if your business accepts checks, you have been affected by this. As well as being stuck with bank fees for depositing a bad check - and the incredibly real possibility that the bad check may impact your most important thing - there exists the time, aggravation and cost associated with recovering the funds. It's typically the case that recovering the check can incur even more in costs than the value of the first debt. Inevitably, many smaller businesses write off bad checks, believing that they can't afford to pursue the debt. Even so, there are a number of ways your business can fight back and minimize the anguish of bad check recovery.
IT'S AN INNOCENT MISTAKE...
For microscopic and mid-sized businesses, the 1st recourse is to call the customer and explain the problem. Do not immediately assume that the customer intended to defraud your business. It's typically true that an innocent mistake has been mass-produced and a calm, reasoned telephone call will feel better your funds and keep what can be a valuable customer. Please be aware that threatening a debtor with publicizing their moniker or even notifying their employer is illegal, so speak only to the host owing the funds and stay cool !
PURSUING THE DEBT
In virtually all States, you are needed to send a qualified letter to the check writer prior to you are able to institute court proceedings. You can request that the debtor also repays the bad check fee you have invoked. The check writer is usually involved respond in ten or even thirty days. This varies by state, so please check with your State Attorney General's office. Again, a calm and reasonable tone typically works well and will make sure you stay in the law. Reviewing the Fair Debt Collection Practices Act ( http://www.fair-debt-collection.com/fair-debt-act.html ) prior to you draft your letter or even produce a call is highly recommended.
While these 2 methods are time and cost-effective, if you have however been unable to feel better the check the obvious next step is to institute court proceedings or even hire a professional debt collection professional. All the same, it is time ingesting and potentially expensive alternatives and - for many microscopic businesses - might mean that the cost outweighs the advantage. However, there are alternative check recovery methods that do not have these possible downsides.
CHECK ENFORCEMENT UNITS
A few areas today have a check enforcement or even check recovery unit that is share of the state or even district attorney's office. It is not available in each state and the services provided do change. In general, though, the check enforcement unit will investigate and prosecute the debtor on your behalf and you will receive the full face value of the check. Contact your local District Attorney's office to see if this service is offered for your area.
ELECTRONIC CHECK RECOVERY
A better all around option is to think about employing 1 of the electronic check recovery services currently available. There are many benefits to electronic check collection on top traditional recovery methods, not least the fact that many of the corporations offering this service charge no fees to your company. More benefits include:
i) Increased Recovery Rates : The National Automated Clearinghouse Association (NACHA) reports increases in recovery rates by as much as fifty percent by comparison with traditional recovery methods.
ii) Low Recovery Costs: No bank fees for redepositing an NSF check electronically.
iii) Benefits to Customers: No want for customers to receive collection letters and calls or even supply a money order or even cashier's check.
iv) Rapid Recovery Times: Traditional recovery methods can take between thirty and sixty days. On average, electronic check recovery takes one week, after which time the recovered check is deposited into the merchant's account.
v) Out of town checks are handled as quickly and simply as local checks.
While bad checks are a fact of business life, recovering funds owed to you isn't the herculean task it may 1st come out. You are able to fight back and however avoid many of the headaches that have been traditionally associated with pursuing a debt.
Jason Schwartz is CEO of Creative CashFlow Solutions, a check processing company established in 1998. Learn even more about their free electronic check recovery service here: http://www.ilovechecks.com/recovery/
Article source: http://www.topiccenter.com/Business/Customer-Service/