QUESTIONABLE METHODS AGENCIES USE TO SUPPLEMENT FEES
Some of our competitors invent ways to try to increase their already published rate and fee structure. You will never hear one talk about such methods, as it is an unspoken part of the collection industry. The techniques are quite innovative and creative. Some of the well-known dubious methods are:
TRIAL FEES IN ADDITION TO THE SUIT FEE – Some agencies will use an attorney as the scapegoat claiming that there is an extra charge if a case goes to trial. The false pretext is that the suit fee covers counsel’s appearance at a trial. We view trial fees as just another gimmick by an agency to soak a client for additional fees. The suit fee is in lieu of a trial fee, as one should never be added to the other.
MAKING COURT COSTS AND SUIT FEE CHECKS PAYABLE TO THE AGENCY – When the agency seeks a suit fee and court costs quote from an attorney, it is not beyond a competitor to quote an inflated higher figure, cash the court costs and suit fee check, pass on what the attorney asks for with the agency pocketing the rest. Agencies are allowed to endorse checks regardless of the payee. All court costs and suit fee checks directed to Williams & Williams are passed along and always endorsed by the attorney. This is substantiated by the attorney’s endorsement on the back of the cancelled check.
ATTORNEY BAR RATES – Some agencies will allege that attorneys in some areas will not accept a referral on established Commercial Law League of America rates. This serves as “justification” for the agency to increase the contingency. Williams & Williams, Inc. has never encountered a situation in a locale where a commercial collection attorney would not handle a referral on the established Commercial Law League of America commission schedule.
CREATING FALSE PREMISES – It is not beyond an agency to have within their Terms & Conditions that if anything unusual occurs, fee rates can be increased. You are at the mercy of the agency; consequently, there is no way to determine whether or not a premise is true or false.
HOLDING SUIT FEE ENTIRELY CONTINGENT IN EXCHANGE FOR AN INCREASE IN FEES – An agency could approach a client with the “dilemma” that the commercial collection attorney wants all of the 10% suit fee “up front” on a “non-contingent basis.” Get ready as the stage is now set where the agency will ask their client if they would be willing to consider a higher contingency rate as an incentive for the attorney to hold the suit fee entirely contingent upon collection. If agreed upon, the next thing you know is that the agency prevailed upon the attorney to reverse his request in exchange for a higher commission. In reality, the agency pockets the difference and pays the attorney regular CLLA commissions.
POOL ACCOUNTING – Some agencies, as part of their terms, state that they will cut a check at the end of the month following a collection that is the aggregate total of all collections. This type of accounting is convoluted, difficult to follow and “creative.” It is best to utilize an agency like Williams & Williams, Inc. that provides a separate accounting for every individual payment or reduction on account.
NEBULOUS CONTINGENCIES AMENDING THE ORIGINAL FEE STRUCTURE – Be on the lookout for any type of vague reference such as it takes an unusually long period of time to resolve a case or if other “unusual factors” are encountered, which characterize continued handling being outside of the norm. This is nothing more than a “setup” to justify an increased fee arrangement. With Williams & Williams, Inc. – a deal is a deal!
SETTLEMENTS WITHOUT CLIENT APPROVAL – Sometimes an agency will settle an account before obtaining client approval. Justification follows instead of presenting a settlement for a client’s consideration. There is always a creative way to justify why a settlement was taken, even if he means an exaggeration of the truth or “economically it was the best position.”