A debt collection agency, often just called 'collection agency', is a company that will pursue individuals and businesses who still owe money on debts. Thus they will tend to work for creditors or for lenders and will then try to return these groups' cash in return for a fee or often a percentage of that money. Many companies can use debt collectors, but largely they will be used by those who lend a lot of money - banks, mortgage companies, debt consolidation services, car financing companies and the like.

There are a vast range of debt collection agencies, and they perform a great variety of roles in collecting debt. Third party debt collection agencies for instance are those that are contracted to collect on debt and this is normally a fee - as opposed to some very large businesses that might have internal debt collectors or that might try to handle the situation themselves. Using a third party debt collection agency however means that you will be using experts in the field who will have full knowledge of your legal rights as a lender and also a lot more experience in getting back your money in the most efficient way possible. Each country has specific laws regarding collection agencies, and so Australian collection agencies will work differently to those in other territories.

There are many methods however that are used largely universally by debt collectors. 'Collection calls' for instance are calls where the collectors visit the homes of those in debt in order to inform them of their debt and their obligations. Normally statistics will then be collected so that the collectors can learn when the individual is most likely to be home - this is the kind of in-depth collection achievable by using a good third part debt collection agency.

Debt collectors have to abide by many rules and may not be rude or threaten violence. At the same time they may not deceive the person in debt by saying they could be arrested etc. As well as this being illegal, it is also a far better business practice as it would not put other individuals and companies off of using the creditors in future - and it is important for a company to give off a friendly and professional reputation. In these circumstances a debt collector will be acting as an 'ambassador' of sorts for your business so it is very important to use a good one. At the same time though they must be skilful in establishing a rapport with your clients and in convincing them to pay the money this way without the borrower cutting off contact. They will also be required to help agree on the price that is owed - particularly in disputes between debtors and creditors - and to arrange a repayment plan that suits all parties.

When a creditor lends money to a third party, they are essentially taking out an investment on that person - trusting them to pay back their debt with interest so that the company's money grows. There is a large element of trust then, and when this unfortunately does not work out, a good debt collection agency is the best way to make back that investment.