Collection agencies are focused on recovering debts that are past due. These companies often reach out to your unpaid accounts in a number of ways, including by phone, in writing and via email, and visiting in person. In extreme cases, they may seek legal recourse on behalf of your company.
debt collections agnecies are responsible for tens of billions of dollars recouped every year.
While there are many reputable collection agencies, there is a reason the industry has earned a bad rap. Some agencies rely on unscrupulous, harassing, or illegal tactics to collect, and that's something to avoid at all costs because it reflects poorly on your business.
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There are strict laws surrounding collections efforts, and any reputable agency will always follow them. Many people confuse collection agencies with debt buyers, although there are distinctions between the two.
Debt buyers purchase debt for a reduced price – sometimes pennies on the dollar – and keep all the money they collect. Collection agencies, on the other hand, are paid a percentage of any outstanding debt they recover, but they don't own the debt. When they collect a debt, they hand the money over to your company, minus a certain percentage in fees.
If you've hired a debt collection agency, it is important to hire a collection agency that is experienced, professional, and Industry oriented.