Definition - What does Collection Agency mean?
A collection agency is a business whose sole purpose is to collect outstanding debt owed to other people or businesses for a fee. The fee charged by a collection agency is usually a percent of what is collected on the debt. There are times where a collection agency buys the debt entirely from the creditor whom it was originally owed and then the collection agency can keep the entire debt they collect in that matter. Collection agencies must follow the law in their collection efforts including the Fair Debt Collection Practices Act.
Justipedia explains Collection Agency
There are rules that a collection agency must follow, such as not calling a debtor beyond 9pm. If a collection agency is found to be harassing a debtor, a judge can issue a judgment prohibiting the agency from using those techniques.