Types of Debt Collections Agencies
Dating back to ancient civilizations, creditors have used different methods to collect the debts owed to them, including “debt slavery” and debtors’ prisons. Today, creditors often try to recoup the unsecure debts they’re owed by working with a collections agency.
A collections agency or debt collector is simply a business that attempts to collect delinquent debts on behalf of creditors. Here are some of the types of collections agencies that operate in the United States:
- First-Party Agencies: First-party agencies are normally subsidiaries of the lender that extended the debt.
- Third-Party Debt Collectors: Third-party collectors are independent organizations the original lender hires to collect their debts in exchange for a fee.
- Debt Buyers: These companies buy the original lender’s outstanding loans for a percentage of their value and try to collect the outstanding balances, plus interest for themselves.
Predictive Dialer for Collections
Regardless of whether an organization is a debt buyer or a first- or third-party agency, a debt collector may have hundreds or even tens of thousands of leads to contact at any given time. With so many people to contact, many debt collectors use phone dialer software for collections agencies.
A collections dialer enables your staff members to contact more people during a single shift, make notes about their calls, update records, track calls and leave personalized voice mails. Depending on the collections dialer you choose, you can even use a local presence caller ID instead of an out-of-state or toll-free number, which may make it more likely that your agents’ calls will be answered.