Top 10 Collection Agencies List 2018

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Read our buying advice for collection agencies

Debt Collection Agencies Guide

Debt collection agencies are a means to an end: They help end the difficult problem of bad debt, or money that you've lent and cannot collect. While it is possible to deal with this situation internally, it's costly to track down debtors and continue attempting to collect, especially if you're part of a small business. There are several methods to implement to avoid needing to collect debts, but sometimes you'll just need a professional. After all, your job doesn't include running around trying to close delinquent accounts, which affects your resources and tests your patience. In these cases, it's a good idea to hire a debt collection agency. With that in mind, not all are equal, which means not all will work for the kind of business you run. The tactics and behavior of the agency will have an impact on your company's reputation as well, so it's key to pick one that is likely to get your debt repaid while remaining respectable about it.

Comparing Agents

It can be difficult to find the right debt collection agency, especially since you might not know how to predict whether or not they'll succeed. Consider looking at the following factors:


Typically, debt collection is contractual work, done on a contingency basis. The agency takes some of the money that they collect, and the rest goes back to the company that hired them. Depending on the debt age, the amount that is owed, debtor demographics and how many collections you have, commissions may be as little as 10 percent or as high as 50 percent. On average, however, they're usually about 25 percent for delinquencies under a year old. Typically, the collection agency will have the same overhead regardless of the size of the debt. However, larger debts offer a bigger dollar amount on commission, which means the agency is more likely to offer a smaller percentage on larger debts. Newer debts are also more likely to be recovered, so that percentage often is low as well. Once a lawyer is likely to get involved, you'll start seeing the high percentage marks. Be sure to balance the commission with the agency's rate of recovery. If you need to collect $10,000 and are willing to pay 25 percent commission for a company that recovers 70 percent of the debt, you'll get back $5,250. A 10 percent commission seems great, but if the agency only recovers 40 percent, you'll only get paid $3,600.

Hiring Tips

Like with any industry, you must do your research. Some debt collection agencies work better in some industries but poorly in others. For instance, you cannot hire any agency for government debt collection -- this will require specialists with a history of recovering such debts.

Verify the Legitimacy of the Agency

There are different rules set into place depending on the state and locality of a debt collection agency. Make sure to ask for proof that the agency is bonded and licensed, and ensure their tactics fall in line with not only your needs but the Fair Debt Collection Practices Act.

Be Open and Upfront

Agencies are more efficient with all provided information. For every account that you want to send over, be sure to give them as much of the following information as you can:

Avoiding Debt

While it's impossible to guarantee that you'll prevent every problem, there are several tactics you can take to reduce the overall likelihood of getting into bad debt:

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