Debt Collection Industry

Debt collection is the process of pursuing payment of money or other value owed to a creditor by individual or business debtors, carried out by organizations known as collection agencies or debt collectors. The industry is made up of first-party agencies that are departments or subsidiaries of the original creditor, third-party agencies contracted to collect on a fee or percentage basis often between 25 and 40 percent of what is recovered, and debt buyers who purchase delinquent accounts at a reduced price and then attempt to recover the full amount themselves. Most collection agencies act as agents of creditors, collecting for a fee or a share of the amount owed, and in the 21st century legislation in many countries regulates debt collectors and limits harassment and practices deemed unfair, in contrast with historical methods such as debt slavery and debtors prisons.