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Collection agencies provide a service to businesses that want to serve some of the following needs.
1. A company is too small to have a collection department of their own.
2. A company lacks the expertise to collect the money themselves.
3. A company wants to protect their company image and not get their hands "dirty."
4. A company thinks a collection agency will get faster results.
A collection agency is an organization that obtains or arranges for payment of money owed to a third party; this could be a person or a company. Sometimes this is even a task taken on by an attorney or a law firm. The collection agency typically develops a fee structure based on a percentage of the moneys collected from bad debtors.
Collection Agency Tips:
Fact: Collection agencies nationwide have tripled their income in the past 10 years and boosted staff levels by 50 percent in the past five years, according to industry figures.
Fact: In the past three years, fewer than 1 percent of consumers who dealt with a collection agency filed a complaint with the association.