Third Party Collection Agencies
What are Third Party Collections Agencies?
These are companies which are not part of the original contract who help in recovering funds that are past due.Third party collections refer to the practice of hiring a third-party agency or company to collect unpaid debts on behalf of a creditor. The creditor (the original person or company owed the debt) hires a collection agency to pursue the debtor and collect the outstanding balance.
What is the role of Third Party Collection Agency?
Third-party collection agencies are often used because creditors may not have the resources or expertise to pursue collections themselves. In addition, collection agencies have access to specialized tools, such as skip tracing software, that can help them locate debtors who have moved or changed their contact information.Easily interface with multiple agencies by integrating A/R Teams to exchange Data with top collection agencies.
How does Third Party Collection Work?
Third-party collections work by outsourcing debt collection to a specialized agency that has the resources and expertise to recover unpaid debts. When a debt goes unpaid, the creditor may decide to hire a collection agency to pursue the debtor for repayment. The collection agency will then contact the debtor and attempt to collect the debt on behalf of the creditor. If successful, the collection agency will typically take a percentage of the amount collected as payment for their services.