I need to employ the services of a collection agency in the US. Most out there sound very sketchy. Does anyone have a good experience dealing with a particular firm? What are the typical fees and turnaround time? Do they go to court on your behalf? Do they need to be in the same state as the customer I am trying to collect from?
You generally hire a collection agency in the location where the work was performed. If you are a consultant and the work was performed (for the most part) at your location, you hire a local collection agency. Make sure they have an attorney on staff. They have to follow federal rules sending warning note after warning note for at least 6 months (it's been a while since I did this). Eventually they will take the firm to court. Ideally you want this to be local to you and not local to the firm you are collecting from. (It costs them more to defend themselves this way, making them more likely to settle.
Rates are negotiable, typically a minimum of 18% and often 25% or higher. Rates vary by how well you negotiate and your case. (You do have POs covering all the work done, they have accepted the product/service, and are using it?)
You are right to have reservations about dealing with some agencies, as they have gotten a bad wrap because of the action of a few firms.
You should keep in mind that all debt collecting efforts have a set of rules and standards under which they operate, called the The Fair Debt Collection Practices Act.
The Fair Debt Collection Practices Act is:
Only Contacting clients during the day, Not harassing with phone calls, not using profanity, no threats of any nature (calling police, physical harm, garnishing wages, seizing assets).
Every agency has a different way of getting paid, often times its a percentage of the bad debt or a set price for the beginning, this is the most common as it motivates the agency to get the debt settled. Some agencies also work on an hourly rate.