Collection Agency Problem

Hello

We are a small business in Michigan. We hired a collection agency from NY to collect a debt from a client in Michigan. They collected the debt, after we told them to drop it, and never informed us. The client did. When I contacted them about this, they became verbally abusive, and I hung up. After another month of not being paid by them, and them not returning phone calls, I called the BBB of NY. The BBB was unable to get this company to respond. This company owes us $2,750.00. I filed a complaint with the NYC Police department, claiming fraud. This at least produced, for the first time in 7 months, a return phone call from the agency. They said they had no record of collecting the debt. Once I faxed over all the info, including cancelled checks, etc., they "remembered" the debt. But now the new excuse is they have financial problems. They say they are waiting to see if a court case they brought against someone pans out. If it does, we "might" get paid. Anyway, this is a mess. I am wondering about filing a small claims. Can a business file against a business? What is the doller limit? Do we file in Michigan or NY?

Thanks so much!

Read your collection agreement. It should include a 'location clause' stipulating where any disputes are to be litigated (if it is their agreement, it will probably say New York).

My suggestion is to hire an attorney in Michigan. He can look at the documents and determine the venue. Also, he can send them a demand letter that will probably have much more impact then your phone calls and letters. Finally, if needed, he can determine the next logical step in pursuing recovery of your money, and his fees are very probably recoverable also. (In any case, his cost for advise and writing the demand letter should be reasonable.)

The collection agency obtained our business from a fax advertisement they sent. The client they collected from is also in Michigan. Is that enough proof that they are doing business in Michigan to allow us to file a small claims in Michigan? Can they be forced to defend themself here, even if the collection agency is in NY?