Collection agency Definition
A collection agency is a business that pursues payments on debts owed by individuals or businesses. Some collection agencies operate as agents of other companies, and collect debts for a fee or percentage of the total amount owed. Others work on their own account, purchasing debts from a creditor for less than the dollar amount of the debt and aggressively persuading the debtor to make their payments. A creditor may sell debts to a collection agency in order to remove them from their accounts receivable records; the difference between the original amount loaned and the sale price to the collection agency is written off as a loss.