Types of Collection Agencies

Financial Credit Collection

Commercial credit collection agencies provide services to the financial sector like banks and financial institutions. The types of debts range from auto loans to credit cards to mortgage payments. These credit collection agencies buy bad debts at discounts from banks, retailers, and auto financiers and then engage in the debt recovery process.

Health Care Credit Collection

The prime motive of a health care provider is to ensure that a patient receives quality and timely medical attention. An additional responsibility to collect debts may dilute the focus of the health care provider and also affect the financial strength of the organization. Hence a health care provider can agree to partner with a credit collection agency for any legal debt recovery. The methods employed for debt recovery are determined by agreement between the healthcare provider and the collection company, in line with the parameters allowed by law.


Credit collection agencies also offer their services to retail business operations. Debt collection for these creditors includes debts like unpaid health club memberships and telephone bills.

Bad Check Recovery

Bad checks/NSF can be detrimental to the cash flow of a business and the collection of bad debts arising due to fraud can become an unwieldy task for a business. Collection agencies are equipped with the necessary know-how and resources to tackle such cases involving bad checks. Such collection agencies would pay the receiver an up front sum of a certain percentage of the face value of the check.

Outsourcing the credit collection process allows the creditor to pass off debt liability to an agency that is better equipped to recover these bad debts. The bad debt account is evaluated and the creditor is paid an up front sum. The liability of the debts is then passed on to the collection agency.

Collective Bargaining

Good Practices to Consider for Safe Blood Collection

Debt Collection – Unfair Practice Guidelines

When a debt turns bad, the creditor will engage numerous tactics to recover the debt. The tactics employed by the creditor varies from one company to another company. The most common ones are sending payment request letters by hand, normal mail, registered mails, couriers, emails or visit the debtor at his work place or home.

When faced with stubborn debtors, the creditors may engage third party collection agencies or engage a lawyer to file legal suit to recover the debts.

The debt collection tactics can turn rough and in certain cases have caused undue pressure to the debtors which can severe the health of the debtors and their closed ones.

Therefore, most countries have setup an Office of Fair Trading to monitor and control the money lending industry to ensure fair practices between both the creditors and the debtors.

All creditors must abide by a set of guidelines outlined by the local Office of Fair Trading. The main objective of the guideline is to protect the interest of the creditors without jeopardizing the health of the debtors. Included in this set of guidelines are the unfair debt collection practices which prohibit the use of improper actions by the creditor against the debtor during the debt collection process.

Many debtors and staff of the financial institutions or collection agencies are not aware of the existence of this unfair debt collection practices. Both parties are anxious to know what these guidelines are and has anyone been subjected to unfair practices.

Here I would like to share with you on some details of these guidelines which should be done or are prohibited during the collection process:

1. The creditors or collection agencies must identify themselves and let the debtor know about their identities, their roles and their purpose.

2. Unhelpful technical languages should be avoided by both parties.

3. If the debtor suggest a place or a time to meet later, such request should be regarded or considered.

4. The creditors or collection agencies should not do things that could jeopardize the debtors’ health such as ignoring requests of not contacting them at work which could jeopardize their jobs.

5. Putting the debtor under undue pressure.

6. Mislead debtor to believe that being in debt is a crime.

7. Suggest to debtors that they should their properties or assets to settle the debts or loans.

8. Recommend or suggest to debtors to apply for new loans to pay off their debts. Such act could amount to instigating the debtors to commit fraud.

9. Engage more than one debt collecting agency at any one time.

10. When the debt is in dispute with the debtors, the recovery proceedings or efforts should be temporary stop until they are settled.

11. It is the creditor’s obligation to prove the debts to the debtors.

12. The right to pursue legal suit against the debtors will lapse in the event that the creditors did not contact the debtors for more than 6 years with regard to the debts.

13. Creditors are fully responsible for the actions of the collection agencies that they appoint.

The above only provides a brief guideline of unfair practices and you should check with the local Office of Fair Trade for full details. All situations are investigated on a case-by-case basis and may differ from one another.

Creditors that found to be practicing unfair tactics can be penalized severely not limited to suspension of Consumer Credit License.