How to choose a debt collection agency
By Kai Greenspan, Founding Editor · Last updated: 4 July 2026
What should you verify first?
Start with legality, not marketing. In Texas, a third-party collector must have an active $10,000 surety bond on file with the Secretary of State before collecting anything; our five-minute verification guide shows exactly how to check. An agency that fails this first gate is not worth a fee conversation, whatever it promises about recovery rates.
How do you read an agency's complaint record?
The CFPB Consumer Complaint Database is the public record of consumer complaints against debt collectors. A complaint is a record, not a verdict, and bigger agencies naturally accrue more of them; what matters is the pattern and how complaints were resolved. Our agency profiles show each agency's count with its source and date, so you can compare like with like.
What do certifications actually tell you?
Certifications such as CLLA and CCAA are independent, audited standards covering trust accounting and operating practice. They are voluntary, so holding one signals an agency has chosen scrutiny. They are a strong positive signal rather than a guarantee, which is exactly how our methodology weighs them.
How do fees usually work?
Most collection work is contingency-based: the agency keeps an agreed percentage of what it actually recovers, and you pay nothing on unrecovered debt. Percentages vary with the age, size and type of debt, and this site does not publish fee benchmarks it cannot verify, so treat any quoted figure as a starting point for negotiation and get the final rate in writing. Ask specifically about older debts, part-payments, and what happens if the debtor pays you directly after placement.
Common questions from first-time buyers
How do debt collection agencies charge?
Most agencies work on contingency: they keep an agreed percentage of what they actually recover, and you pay nothing if they recover nothing. The percentage varies with the age, size and type of the debt, so get it in writing before placing accounts. Some agencies also offer flat-fee or hybrid arrangements.
What should I check before hiring a debt collection agency?
Three things, in order: that the agency may lawfully collect in your state (in Texas, an active surety bond on the Secretary of State register), its public complaint record in the CFPB database, and whether it holds recognised certifications. All three are free public checks, and our profiles link each one.
Commercial and consumer debt: does the agency type matter?
Yes. Consumer collection is heavily regulated (the FDCPA and state rules), while business-to-business collection follows different law and tactics. An agency experienced in one is not automatically suited to the other, so match the agency's stated debt types to the debt you actually hold.
When is a debt worth sending to collection?
Generally once your own reminders have failed and the debt is still fresh; recovery odds fall as debt ages. Weigh the agency's contingency percentage against the amount owed, and consider whether preserving the customer relationship matters, since third-party collection usually ends it.
What is the difference between a collection agency and a debt collection attorney?
A collection agency pursues payment through demand letters, calls and negotiation, and is usually paid a share of what it recovers. A debt collection attorney can go further: filing suit and pursuing court remedies. Texas law reflects the split: the Finance Code’s definition of a third-party debt collector generally excludes an attorney collecting a debt on a client’s behalf. As a working rule, agencies suit volume and earlier-stage recovery; an attorney suits a large debt where litigation is realistic. Before placing accounts, ask any agency how escalation to legal action works and what it would cost.
What is a debt buyer, and how is it different from a collection agency?
A collection agency collects on your behalf and the debt remains yours; a debt buyer purchases the debt outright and then owns it. The CFPB describes debt buyers as businesses that "buy past-due debts from creditors or other businesses and then try to collect them". Selling produces immediate cash but usually for a small fraction of face value, and you give up control over how your former customer is treated afterwards. Debt Collection Index lists third-party collection agencies, not debt buyers.
Does the FDCPA apply to business (B2B) debts?
No. The FDCPA defines a debt as an obligation of a consumer arising from a transaction whose subject is "primarily for personal, family, or household purposes". Unpaid invoices between businesses fall outside it, so the federal statute’s conduct rules do not govern pure commercial collection, which instead sits under state law and the terms of your contract. Do not read that as a free-for-all: state statutes still apply, and reputable commercial agencies hold themselves to industry standards. It does mean commercial and consumer collection are different disciplines; match the agency to the debt.