Collection Agencies

A collection agency specializes in collecting payments on debts owed by individuals or businesses. Some collection agencies operate as agents of creditors and collect debts for a fee or percentage of the total amount owed. Other collection agencies known as debt buyers purchase debts from creditors for a fraction of the face amount and then pursue the debtor for the full balance (making a profit on the difference between what they paid for the debt and what they collect). Businesses (creditors) may send debts to a collection agency in order to remove them from their accounts receivables and write them off as bad debt losses.