A collection agency is a business that pursues payments of debts owed by individuals or businesses.[1] Most collection agencies operate as agents of creditors and collect debts for a fee or percentage of the total amount owed.[2]
There are many types of collection agencies. First-party agencies are oftentimes subsidiaries of the original company the debt is owed to. Third-party agencies are separate companies contracted by a company to collect debts on their behalf for a fee. Debt buyers purchase the debt at a percentage of its value, then attempt to collect it. Each country has its own rules and regulations regarding them.
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