Debt Collection 

The debt collection industry generally works for the collection of debt either independently, under some companies or attorneys. These industries act as a middle person and collect debts of the customers if it is over 60 days due. 

The creditor who hires the debt collectors pays an amount of percentage generally from 25% to 50% of the amount which the debt collectors collect. The debt collection industry collects all types of debt, including credit cards, loans for an automobile, personal loans, student as well as business loans, and even telephone bills from their high-risk merchant account.

There are many types of debt collection agencies. There are first-party debt collectors agencies, the departments or subsidiaries of the original company where the debt is owed. There are third party agencies who are separate debt collection firms that a company hires for the collection of debt on behalf of a fee amount. 

Each country has separate kinds of rules and regulations for the debt collecting. The debt buyers purchase debt at a percentage of value from the company and then collect it.

First-party agencies

The first party agencies are a part or subsidiary of the original company that owns the debt. For the high-risk credit card processing for debt collection, the first-party agencies generally get involved first and try to maintain a good customer relationship during the debt collection process. 

The first party agencies are called as a first-party agency because they are the first one to contact by the company to collect debts, and then the second party is the consumer or the debtor who owns the debt are contacted. They do not have any relation with third party agencies.

Third-party agencies

These agencies are not the party for the original contract. They are generally contacted or assigned work for the collection of debt by a company or an agency, which generally includes a huge contingency fee, which is a high-risk merchant processing

Sale of debts involves the process of debt collection, especially to the third party company referred to as debt buyer. The sale of the debts will fully credit revenues to the creditor while shifting the full work of debt collection and risk to the debt buyer.

In most of the Americans, loans, credit cards, credit lines are away for most of the families to pay for their lifestyles. 

When a high amount of loans involves, the missing of a few payments is a natural thing. But it leads to the path of overwhelmed debt. That is when the debt collectors involve the situation and collect money from debtors for the companies.

The debt agencies are considered as a high-risk merchant account, as they don’t look favorable. Due to a large amount of return item chargeback and the business nature involving, banks do not trust them with a merchant account.

When the business is turned away, a high-risk credit card processing is done; also, these businesses’ nature and reputation make them a high-risk merchant account. That is why they need to find high-risk payment processors for providing them with a high-risk payment gateway and other facilities.