A collection agency, also known as a debt collector, is a business or other entity that specializes in debt collection, i.e. pursues payments of debts owed by individuals or businesses. Most collection agencies operate as agents of creditors and collect debts for a fee or percentage of the total amount owed.

There are many types of collection agencies. First-party agencies are often subsidiaries of the original company the debt is owed to. Third-party agencies are separate companies contracted by a company to collect debts on their behalf for a fee. Debt buyers purchase the debt at a percentage of its value, then attempt to collect it. Each country has its own rules and regulations regarding them.

History

Debt collection has been around as long as there has been debt and goes back to the ancient civilisations, starting in Sumer in 3000 BC. In these civilisations if a debt was owed that could not be paid back, the debtor and his wife, children or servants were forced into "debt slavery", until the creditor recouped losses via their physical labour. In some societies debts would be carried over into subsequent generations and debt slavery would continue. However some early societies provided for periodic debt forgiveness such as a jubilees or would set a time limit on a debt.