Businesses lose hundreds of thousands of dollars daily to unpaid debt and the attempt to recover funds from delinquent debtors. Already seeing the consequences of outstanding debt, these businesses lose more by pursuing debt collection in an economy where delinquent debt runs rampant.
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The label collection agency is frequently applied to third-party agencies, they are named that because they were not a party to the original contract. The creditor gives accounts directly to such an agency on a contingency-fee basis, which ordinarily at first costs nothing to the creditor or merchant, except for the cost of communications. This be that as it may is dependent on the individual service level agreement that exists between the creditor and the collection agency.
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In a business column dated January 20, Baltimore Sun writer Jay Hancock seems to delite in the fact that a prominent accounts receivable management firm filed bankruptcy in the midst of an unemployment-driven recession. Speculation suggests the underlying message of the article was to threaten violence against collectors.
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