About Debt Collection Agencies
Debt collection agencies act on behalf of creditors to collect debts when the
creditors don't have the time or resources to chase down severely overdue debts
for themselves. Collection agencies specialize in this kind of work which means
they have staff that specializes in debt collection, which covers a broad range
of legal and negotiating skills, and a streamlined process for pursuing
accounts.
As a creditor, when you hire an collection agency, they are assigned the job of
collecting the debt. Normally, if the agency is successful in debt collection
the collection agency will retain a percentage of the amount collected as
payment for services.
Typically, collection agencies do not take over the debt. The debtor does not
actually owe them money. It still owes to the creditor. But the collection
agency will provide evidence (known as debt validation) that they have been
empowered to collection the debt on behalf of the creditor.
Occasionally, collection agencies will purchase the debt from the creditor.
However, usually all that the collection agencies acquire is the right to carry
out the process of debt collection.
All collection agencies are governed by federal laws and no collection agency
is, or wishes to be in, the business of collecting fraudulent debts. However,
when acting on behalf of a legitimate creditor they will take all legal steps to
enforce the collection of badly overdue accounts, if necessary going to court on
behalf of the creditor.
