Are bad checks hurting your business?
A common problem for most payday loan, cash advance, and check cashing businesses is "collecting bounced checks." Unlike most businesses that receive returned checks, the bounced checks written to payday loan and check advance businesses are among the most difficult to collect.
You may have checked with your District Attorney Office (if it has a bad check restitution program) and been told that you bounced payday loan or check cashing checks do not qualify for their worthless check collection service. You may have contacted one of the many bad check collection services and been told that they also will not process your returned checks.
Perhaps you have tried to take bad check writers to small claims court and found that this is also not an effective means to collect bounced checks. A judge may have ruled in your favor, but the bad check writer never paid the judgment. If you accept checks for the repayment of a payday loan or a cash advance, but your bounced checks are piling up month after month, what solutions are available to your business?
The bad news is that the check collection solutions for check cashing businesses, payday loan services, and cash advance businesses are more limited than other types of debt. Many debt collection attorneys may not want to pursue the types of checks you have because the face value of the checks is often less than $1,000.00 (they want higher dollar accounts). Some collection agencies are not all that interested in payday loan debt collection because these accounts are usually the most difficult to collect. Check guarantee services are perhaps one possibility for payday loan and cash advance services, but they are usually very costly.
There is a solution!
There is at least one national debt collection option for payday loan, cash advance and check cashing businesses. NorthStar Technologies is a nationwide collection agency service that specializes in bad check collection (you may read about NorthStar's services on www.bumchecks.com). NorthStar automatically uses its advanced collection agency services for all payday loan, cash advance and check cashing services and this service is a no-fees 50/50 contingency split of everything it collects. If NorthStar cannot collect, it absorbs all the collection costs. If it can collect, you receive 50% of everything that is collected. As the old saying goes, "50% of something is better than 100% of nothing." Why write off bad checks when NorthStar pays all the collection costs and will return 50% of all that is collected?
Some check cashing and payday loan businesses try to do their own internal collections. If this is your choice, NorthStar will accept and process the checks you cannot collect. If you try to collect bad checks on your own, perhaps by turning to a "collections guide" and find that the process does not work well, outsourcing the bad check collection service to a third party such as NorthStar may save you a significant amount of time and expense.
If you would like to more fully discuss your payday loan collection needs, please use the contact link on the left site of this page or contact me (Brad Price) by e-mail or phone (574-875-9994).