Debt Recovery Agencies To The Rescue
Debt Recovery Agencies or Collection Agencies as they are more commonly known are big business in America. Contrary to public belief, there is no one-size-fits-all Collection Agency; in fact many Agencies specialize in different types of collections. Some Collection Agencies specialize in collecting bad debts for small to medium sized businesses, while others specialize in Commercial, Legal or Medical collections.
Most reputable Debt Recovery Agencies will belong to the Better Business Bureau, and all Agencies are governed by the rules of the Fair Debt Collection Practices Act (FDCPA), which defines the rules Collection Agencies must adhere to.
When a Debt Recovery Agency is contracted by a business, they become the third party assignor of the debts, meaning they have the legal right to collect, but not to keep the all of the collected funds or property. Using specialized industry collection software, an Agent is able to keep track of any and all information on a delinquent account holder. When an Agent is successful in recovering a bad debt, they receive usually 20-30% of the recovered funds. A Recovery Agent may be hired to recover one, or a portfolio of bad debts, within a contracted time period, which may or may not be renewed by the Business owners.
Unlike Businesses, Debt Collector Agents have access to government databases that can assist in locating missing and delinquent account holders. Such databases include the Social Security Master Death Index, and State and Federal bankruptcy databases. This process is termed skip tracing and can help a Collection Agent determine whether or not a debt will be partially recoverable, fully recoverable or non-recoverable.
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