COLLECTION SERVICE AGREEMENT
AGREEMENT FOR COLLECTION SERVICE
THE PROFESSIONALS AGENCY, hereinafter referred to as "AGENCY" and
____________________________________, hereinafter referred to as "CLIENT",
agree that CLIENT's delinquent accounts (the "Accounts") placed with AGENCY
are uncontested and subject to the terms and conditions of the following
agreement between the parties:
1. The conduct of AGENCY in collecting the Accounts shall be in compliance
with all applicable Federal, State and Local laws and shall be courteous
and businesslike, consistent with the image and reputation of CLIENT.
2. Sums collected by AGENCY on accounts shall be deposited immediately in
an account maintained in a bank, the deposits of which are insured by the
FDIC, for CLIENT as well as AGENCY, and/or remit payments made payable to
the creditor when requested to do so. CLIENT agrees that AGENCY is authorized
to endorse checks received from or in behalf of debtors and drawn in favor
of CLIENT for deposit to the Agency Bank Account.
3. All sums received by AGENCY on the Accounts will be remitted to CLIENT,
less AGENCY's Collection Fee (as such term is defined below), by the (1st)
and the (15th) day of each month. In the event CLIENT receives any sums in
payment of an Account directly from or in behalf of a debtor after AGENCY
has commenced work to collect the Account, CLIENT shall report such collection
to AGENCY and AGENCY shall invoice CLIENT for the amount of the Collection
Fee due on its next monthly statement.
4. AGENCY will prepare a monthly statement of financial transactions containing
the names of all Accounts, numbers, dates any payments were received by AGENCY
or CLIENT, gross amounts of collections, and Collection Fees due AGENCY.
5. Collection Fees due AGENCY on any statement to CLIENT are due and payable
upon receipt of the statement by CLIENT. AGENCY has the right to offset such
fees unpaid after thirty (30) days against sums received by it on the Accounts.
6. In the event a check is received directly by CLIENT on an Account and
the check is returned unpaid to CLIENT after CLIENT has paid AGENCY the
Collection Fee due, CLIENT shall report such returned check to AGENCY. AGENCY
will list such returned checks on the next statement as a deduction from
the amount of the Collection Fee due and payable by CLIENT for that month's
statement.
7. As compensation to AGENT for its services under this Agreement, the Collection
Fee applicable to sums actually collected on Accounts, other than for collections
involving civil litigation, whether such collections are received by AGENCY
or CLIENT, shall be: for Accounts that have never been placed with a collection
agency or receivables management firm previously ("First Placement Accounts").
The rates Are As Follows:
-
20% - Claims less than 3 months (90 days) past due
-
25% - Claims less than 6 months (180 days) past due
-
33.3% - Claims more than 1 year past due
-
50% - Claims that are "Legal Forwarding" and/or "Suit Requested" (legal action),
Judgments, accounts that a creditor requests we forward to another party
for collections.
8. For Accounts that have previously been placed with one or more collection
agencies or receivables management firms ("Secondary/Tertiary Placement
Accounts"), 50% of the amount collected after the Account is received by
AGENCY and AGENCY has begun to work the Account.
9. AGENCY will not institute civil legal collection action on any of CLIENT's
Accounts without requesting and receiving CLIENT's permission and an Account
balance verification.
10. The Collection Fee on Accounts referred for civil legal action by AGENCY
shall be 50% of the amounts collected prior to or as a result of a judgment
obtained through civil legal collection action referred by AGENCY. CLIENT
agrees to advance all court costs on Accounts referred for civil legal collection
action.
11. AGENCY shall furnish information concerning the Accounts placed with
AGENCY to any of the available Credit Bureaus (If Applicable).
12. CLIENT warrants that all Accounts placed with AGENCY are valid and legally
enforceable debts and are not disputed or subject to defense, offset, set
off, counterclaim or bankruptcy proceeding, unless otherwise disclosed in
writing to AGENCY by CLIENT. CLIENT shall immediately notify AGENCY, by fax,
email or in writing, of any disputes or payments received or bankruptcy
notifications or changes in the status of the account
13. CLIENT shall be liable for and shall indemnify, defend and save AGENCY
harmless from and against any and all suits, actions, claims and demands,
costs, actual damages, expenses and attorney fees incurred in connection
with any Account that is disputed by the debtor or alleged to be subject
to any defense, offset, set off, counter claim or bankruptcy proceeding.
14. AGENCY shall be liable for and shall indemnify, defend and save CLIENT
harmless from and against any and all suits, actions, claims and demands,
costs, actual damages, expenses and attorney fees to which CLIENT may be
subject resulting from (i) the failure of AGENCY to perform or observe any
material covenant, term or condition of this Agreement, (ii) the material
breach by AGENCY of any representation or warranty made by it in this Agreement,
or (iii) the reckless or willful misconduct of AGENCY, its employees or agents.
15. AGENCY is not obligated to file suit in connection with Accounts placed
with it pursuant to this Agreement. AGENCY is not liable for claims that
become barred by any statute of limitations while in AGENCY's possession
unless AGENCY is negligent in failing to timely refer an Account for civil
legal collection action. AGENCY reserves the right to close and return Accounts
at such time as AGENCY makes a determination to do so.
16. CLIENT retains the right, upon 48 hours prior notice, to audit the collection
practices of AGENCY for cash control, promptness of recording and remitting
payments and general compliance with the terms of this Agreement.
17. This Agreement may be terminated by either party upon giving sixty (60)
days prior written notice to the other party. Termination or cancellation
of this Agreement by either party shall not have no effect on the collection,
enforcement or validity of any accrued obligations owing between the parties,
nor shall it have an effect on AGENCY's right to receive Collection Fees
in connection with paying Accounts, as well as the right to recover any court
costs advanced on Accounts as set forth in Section 7 hereof.
18. All notices given or required by this Agreement shall be sent by United
States certified or registered mail, postage prepaid, by a nationally-recognized
overnight courier service, fee prepaid, or by facsimile, any of which shall
be addressed as set forth below. It is further understood that AGENCY is
and will be acting and occupying the status of an independent contractor
and not the status of an agent (except as defined in paragraph 7) or employee
of CLIENT.
This agreement is entered into by and between AGENCY and CLIENT, THIS ______
day of ___________, 19__ by their duly authorized and empowered representatives.
___________________________ DATE:___________
CLIENT SIGNATURE
___________________________ DATE: __________
COLLECTOR SIGNATURE
|