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Types Of Collection Agencies

Apr 2, 2008
When you have a business you may need to use the services of a collection agency. When a collection agency is used they begin a process that works in many cases. Because of the work of the collection agency, debts are made good and money will be returned, less the fee that is charged for the services.

The process of a collection agency is one of negotiation. The company will try to state the facts of the situation and communicate openly with the debtor. Collection agencies want the debtor to have a meaningful response to the situation.

If you need a collection agency there are different types of collection agencies that can assist you.
First, there is the type of agency that collects financial debt. This type of agency collects money owed to banks and other types of financial institutions. These debts may include mortgages, car loans and credit cards. The way these agencies work is they buy the account from the bank or financial institution for a small amount and then proceed to collect the bigger amount of the debt. A bank may believe these accounts will not be able to be recovered so they get some money back when the account is sold to the collection agency.

Health Care collection agencies specialize in collecting medical debt. They include doctor's and dentist's payments that are overdue. Health care providers give clients the best care possible and charge for that care. At many times, the patients don't pay for services and the medical professional may be too busy to spend time trying to collect money. The agency takes over the account and gets a percentage of the amount owed.

Retail collection agencies collect money for businesses such as department stores, telephone companies, cable companies, and other types of businesses.

Bad check recovery is another reason for a business to employ the services of a collection agency. When a company cashes a bad check this causes a business to have a deficit. Even though there is no signed agreement to pay money that is owed, a creditor can still collect the money because it was obtained by fraud. A business may enlist the help of a collection agency to collect the debt but if the amount of the check is of a substantial about, this is a criminal offense that can be prosecuted.

Collection agencies have numerous resources available to them that can assist in collecting outstanding debts. The agency first contacts the debtor with a letter that states that a bill is unpaid. The letter is usually friendly and asks for quick payments in order to have the matter taken care of quickly. This letter will usually say something about the creditor that holds the overdue account and presents a deadline for responding. The debtor is asked to send payment by the specified time.

A telephone call usually comes after the letter. Some collection agencies work through call centers. These call centers have a list of customers to call daily and they take payments over the phone.

Collection agencies are very helpful when it comes to collecting debt.
About the Author
Tristan Andrews is a freelance author who writes articles about Collection Agencies and Collection Agency Quotes.
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