The Best Collection Agency Services of 2020

By
Skye Schooley
,
business.com staff
| Updated
Jul 17, 2020

We've reviewed the best collection agency services for 2020. See up-to-date comparisons on features and the best prices for the top-rated agencies.
Best B2B Collection Agency
Negotiable rates
Free quotes available
Post-judgment collections
Best for Small Business
Online portal
Upfront, transparent fees
Tailored collection strategies
Best B2C Collection Agency
Offers skip tracing
Provides litigation referrals
Agents are extensively trained
We've reviewed the best collection agency services for 2020. See up-to-date comparisons on features and the best prices for the top-rated agencies.
Updated 07/17/20

We've expanded our FAQs about collection agencies.

For business owners, debt collection is, unfortunately, part of doing business. Certainly, no business owner relishes turning an account over to collections; however, you have expenses, too: payroll, benefits, inventory, taxes, and insurance. There are many different types of collection agencies. Finding the right agency for your business depends on your needs, your customer or clients, and the amount you're owed. We researched 17 collection agencies and arrived at three best picks.

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How We Decided
Our team spends weeks evaluating dozens of business solutions to identify the best options. To stay current, our research is regularly updated.
30
Considered
17
Researched
3
Selected

Compare Our Best Picks

  Prestige Services Inc. Rozlin Financial Group Inc. Summit Account Resolution
Collection rates 22%-25% per account Contact for quote 7.5%-50% per account
Minimum debt collected $200 minimum collection n/a $50 minimum collection
B2C or B2B B2B B2C B2B & B2C
Average amount of time it takes for agency to reach a resolution 45 days 30 days 90 days

Our Reviews

Prestige Services Inc.: Best B2B Collection Agency

You can submit new collection accounts through the website.
PSI provides precollection services and bank account searches. It can also assist
PSI only offers commercial B2B debt collection.

Prestige Services Inc. (PSI) pairs its excellent commercial collection features with strong customer service, making it our choice for the best B2B collection agency. It specializes in B2B debt collections throughout the United States, Canada and Mexico. 

To save money, businesses should consider the cost breakdown of a collection agency, as they often charge different percentages. PSI collects its percentage fees on a contingency basis, so you don't pay until your debt is collected. It offers rates 5-10% lower than most competitors, charging 25% for accounts from $200 to $3,000, and 22% for accounts from $3,000 to $20,000. Rates are often negotiable on a case-by-case basis, and volume discounts are available. If your account goes to litigation, fees can rise to 40%.

Read Review

Summit Account Resolution: Best Collection Agency for Small Business

Summit eschews aggressive collection tactics. It prides itself on being professional, friendly debt collectors.
It can help with in-house collections, medical collections, precollections and employee reimbursement debt.
Summit AR has restrictions on the amount of time – two years – accounts have been delinquent.

With its online portal, transparent fees and tailored strategies, Summit Account Resolution is our pick as the best collection agency for small businesses. It has everything a B2B or B2C business needs to collect money from accounts that have been delinquent for up to two years, and it is especially useful for forward-flowing companies that have recurring debt collection needs.

Small businesses often benefit from personalized services and transparent reporting. Once you sign up with Summit AR, you will receive a dedicated account manager who is available to answer any questions or concerns you have. Its online portal gives you 24/7 access in order to input new accounts and check the status of existing accounts.

Read Review

Rozlin Financial Group Inc.: Best B2C Collection Agency

Agents use a personalized approach to help debtors. • Rozlin can help you locate hard-to-find debtors.
It has access to four skip-tracing databases.
The company does not service all 50 U.S. states, nor does it list the states it serves on its site. You'll need to call the agency for more info.

Rozlin Financial Group, Inc. (RFGI) pairs highly skilled agents with excellent consumer collection features and is our choice as the best B2C collection agency. RFGI has every feature a B2C business needs to recover debt from delinquent consumer accounts, such as skip tracing, litigation referral, customized approaches and great reporting. 

Before hiring a collection agency, business owners should ask for a breakdown of the agency's costs. Agencies commonly charge different fees or percentages, depending on the type of debt being collected and other factors. RFGI charges a fee based on a percentage of the debt it collects for you. Its fees are imposed on a contingency basis, so you don't pay them until your debt is collected. If they are unable to collect for you, you don't have to pay anything. 

Recovering consumer debt is no small feat, and a collection agency should offer multiple tools to service your accounts. RFGI attempts to contact debtors by mail, phone and email. They utilize skip tracing and software and litigation referral. Debtors can pay RFGI via check, credit card or through the payment portal on RFGI's website. The agency will mail you a remittance check monthly after they have been paid by your debtor. 

Great customer service is an essential feature for B2C businesses to consider. We were not able to contact RFGI's compliance manager; however, we spoke with a representative who was polite and answered our questions. 

RFGI is an accredited member of the Better Business Bureau with an A+ rating. 

To see all of our recommendations for collection agency services, visit our best picks page. 

Best Features

RFGI employs trained agents who tailor their collection approaches to each individual account. Agents do not use scripts. They undergo extensive training to maximize debt recovery for every account, as quickly as possible. 

The agents use a personalized approach and debtor-scoring strategies to determine the most effective negotiation tactics. Unlike many of its competitors, RFGI places a high priority on each debtor to ensure they receive exceptional treatment and maintain a professional relationship with your business. RFGI offers FAQs on its website to help debtors learn more about the collections process. 

In addition to standard B2C collections, RFGI provides advanced skip-tracing capabilities. Many competitors have limited resources when trying to find debtors, but RFGI has access to four different skip-tracing databases. This is something to consider if you have delinquent consumer accounts where the debtor has moved frequently or skipped the country. 

Limitations

One drawback to opening an account with RFGI is that they require a minimum of five open accounts. Although we could not find pricing percentages or minimums online, we spoke with a representative who confirmed the required minimum. We were not able to receive an estimation of percentages charged per account, but RFGI states you can request a quote online or by phone. The lack of cost transparency online can pose an issue for small business owners who only need a few delinquent accounts collected on and want to quickly obtain a price estimate.

Another downside to using RFGI is that it doesn't operate in all states. Further, it doesn't list the states on its website; instead, you'll need to contact an agent to find out if the state where your business is based is accepted by RFGI. Also, RGFI offers strictly B2C collections – it doesn't collect on commercial accounts.

We called RFGI, posing as a small business owner interesting in hiring a collection agency. During our initial customer service call, a polite representative attempted to put us in contact with the compliance manager, but she was unavailable. The rep informed us she would call back within the next business day; however, she did not. You may need to be persistent when trying to reach the proper agent at RFGI.

Industry Focuses

Rozlin Financial Group Inc. offers B2C collection services for a number of industries throughout the United States, including the following:

  • Medical practices
  • Dental offices
  • Healthcare and hospital collections
  • Schools
  • Landlord and utilities
  • Mortgage and lease collections
  • Credit card collections
  • Retailers
  • Professional services
  • Auto loans

If you are in a unique industry, you can contact RFGI by phone or live chat.

 

Collection Agency Pricing and Negotiation

Although we did find a collection agency that offers fixed pricing, most agencies charge a fee based on a percentage of the collected debt. Typically, fees range from 20% to 50%. However, many factors determine the fees, such as the size of the debt portfolio, the work required to obtain the debt, the age of the account and whether attorneys need to get involved.

Commercial debt is typically less expensive to recover and averages between a 20% and 25% collection rate. Consumer debt costs a little more to recover and averages a collection rate from 30% to 50%. Volume discounts are often applicable for each.

Most collection companies use contingency pricing, which means they do not charge you until after they collect on your debt. This gives many consumers peace of mind. In addition to the basic per-account fee, litigation and court fees may apply.

On average, the longer your accounts remain delinquent, the lower the average success rate of debt recovery. Collection agencies are most successful at recovering debt from accounts that are 60 to 90 days delinquent.

Here is a breakdown of the costs of each of our best picks:

  • Summit Account Resolution: Rates are 7.5% to 50% of each account, with a $50 minimum to be collected. We were quoted a consumer rate of 35% and a slightly lower commercial rate. Litigation fees are additional, and rates are contingent.
  • Prestige Services Inc.: Rates are typically 25% for accounts from $200 to $3,000, and 22% for accounts from $3,000.01 to $20,000. We were quoted an 18% rate for 10 accounts of $5,000 each. Litigation fees are additional, rising to 40%. There is a $200 minimum collection, and rates are contingent.
  • Rozlin Financial Group Inc.: Rates are contingent and based on the amount of each account. It requires a minimum of five accounts. Litigation fees are additional.

When trying to determine the cost of collection agency services for your delinquent accounts, factor in any minimum requirements and additional litigation fees the collection agency may require. Be sure to inquire about all costs when discussing pricing.

Before registering your delinquent accounts with a collection agency, you can ask the company several questions to get the best deal possible:

  • Does it charge fees aside from the standard account percentage?
  • Does it offer discounts based on a large volume of accounts or large collection amounts?
  • Does it offer additional features or discounts for continual, forward-flowing companies?
  • Does it offer volume discounts for litigation?

Although some collection agencies require contracts, many allow you to cancel your accounts at any time, as long as no debt has already been collected. Termination fees may apply.  

Buying Guide

What to Look for in a Collection Agency

There are multiple factors to consider when deciding which debt collections agency is right for you. These are the main ones.

Skip Tracing and Litigation

Collection agencies have various techniques and processes to recover debt from delinquent accounts. Most agencies offer skip tracing, a method of tracking down hard-to-find people, including those who have skipped town to avoid paying their debts. Formal demand letters are generally the first step of contact and can be very effective. Most services send two or three letters before taking further action. If these means of requesting payments are unsuccessful, many agencies offer litigation services should you decide to pursue legal action against your debtor. The best services typically don't charge you until they recover your funds. 

Online Client Portal and Status Updates

When you select a collection agency, it's important to make sure it has all the features your company needs to recover money from delinquent accounts. A useful feature is an online system with a client portal and status updates. Most services have this feature, which is beneficial for receiving live status updates on the company's progress toward recovering your money. 

Location Capabilities

If your business has international sales and accounts, you will need a service that offers foreign collections. Most companies post their location availabilities online; however, you may want to call a customer service representative to be sure your international accounts qualify for the services.

Agency Complaints, Reviews and Reputation

Debt collection can be a sensitive subject; therefore, you'll want to look at a collection agency's reputation. The way it treats your debtors reflects directly on your company, either positively or negatively. While we considered the reputation, complaints and reviews of the services we analyzed, we recommend you conduct further research on any company you're considering. 

Customer Service

You want to find a company that is proactive and quick to respond to any inquiries you have, and one that you can easily contact when you need to. Testimonials are helpful for researching a company's reputation; it speaks volumes when a company can show many satisfied clients.  

Honesty and Human Dignity

You'll want a service that is reputable and honest – one that fights to recover your funds without tarnishing the good name of your company. Most services offer similar features, so the way they execute those features and services should be the deciding factor when you choose a company to recover the funds you've earned. 

Hiring a Collection Agency

There are multiple stages of debt collection, and the first stage starts with you, the business owner. Before hiring a collection agency, you should evaluate your debtor's situation. Take notes on how many days overdue their payments are, how much they owe you and how much you are willing to settle for. Keep in mind that the longer you wait to collect debt, the harder it becomes to collect.

When you begin to speak with your debtor, maintain good customer service and keep phone calls short to avoid harassing them. After all, they may still be a customer of yours, and you may need to keep a cordial working relationship. If they remain unresponsive to your outreach attempts, the next step is to send them a formal demand for payment. This is a written document that outlines the debt owed in detail. This letter is typically effective in resolving debt issues. A formal demand letter is also useful in the case of filing a lawsuit, and it is sometimes legally required. 

If you are unable to resolve the debt collection process on your own, such as by phone or formal demand letter, you may find yourself looking into the next stage, analyzing the benefits of hiring a debt collection agency. Agencies can let your nonpaying party know you mean business.

The cost of hiring a collection agency varies, although the price structure is typically either percentage-based or a flat fee. When looking for an agency, do thorough research to verify that the company is legitimate and accredited, has positive ratings, and abides by laws like the Fair Debt Collection Practices Act.

October 2019: Another thing you may want to ask the collection agency is how it plans to handle the Consumer Financial Protection Bureau's proposal about allowing digital recovery notices. In 2019, the U.S. Court of Appeals ruled against the CFPB's attempt to permit debt collection agencies to send collection notices to consumers by digital means (e.g., hyperlinks, emails and text messages). Some agencies may not be in compliance with these regulations, which could land your business in hot water if you work with them.

November 2019: According to recent reports, the number of top-level collection agencies is slimming down. This can be great for you as a consumer, as it means better options available. However, with the increase of legal demands, mergers, closures and acquisitions, it may be beneficial for you to pay extra attention to the reputation and resistance of the collection agency you are considering hiring. This can help to ensure you choose an agency that will be around long enough to resolve any long-term collections you may need.  

After narrowing your search down to a few credible agencies that serve your industry and location, compare important features like skip tracing, litigation, demand letters, pre-collection and free final-notice forms. The last step is hiring the agency of your choice. The best agencies allow you to add your accounts directly through a simple online portal.

Frequently Asked Collection Agency Questions

Why should you prioritize outsourcing your collections?

When you have delinquent accounts, debtors might ignore your acquisition attempts and refuse payment. While you can make calls and send demand letters, collection agencies have advanced tactics to retrieve your money.

The longer debts go unpaid, the less likely they are to be repaid. If you prioritize outsourcing your collections to the proper agency as soon as possible, you have a higher chance of receiving the full amount of money.

What is the average collection rate for a collection agency?

The cost of hiring a collection agency varies. Agencies typically charge a percentage fee based on the type of collection (commercial or consumer), the amount of debt to be collected and the volume of business you provide.

Some agencies charge a flat fee; however, most charge a contingency percentage rate of 20% to 50%. Depending on the amount of debt you need recovered, commercial debt collection fees are typically 20% to 25% of the sums collected, and consumer debt collection fees are typically 30% to 50% of the sums collected.

If your case goes to court, expect to pay additional legal fees and court disbursements. Your agency will notify you before taking your cases to court, giving you the option to accept or decline. Most agency fees, including litigation, are typically charged after your debts are recovered.

How long can a collection agency attempt to collect a debt?

While some collection agencies also operate as billing companies, most begin to collect on accounts that are 60 to 90 days past due. The longer you wait to collect on a debt, the harder it will be to recover the full amount. Since the money agencies receive often depend on how much they collect, they focus on collecting as much money as they can over the shortest period of time. Each state has a statute of limitations, which restricts the length of time a debt can be collected. In most cases, states allow collection agencies to pursue debtors for 4-6 years after the last active payment on the account.

Can a business be sent to collections?

If a business is past due on its payments, it can be sent to collections. The business then has 90 to 120 days to repay their debt, and if they fail to do so, the creditor can either sue the business or sell the debt to a commercial debt collection agency.

When should a small business hire a collection agency?

For a small business, tracking down unpaid invoices can turn into a full-time job. If your company is having trouble allocating time for this task, hire a collections agency. Another consideration, other than time, is if a particular is hard to collect from. If you're dealing with a difficult debtor, collection agencies are trained to handle this challenge so you can get what you're owed.

Our Methodology

To find the best collection agency for small businesses, we started by listing vendors that appear on reputable online sources, such as review and business websites. We also conducted our own research into the industry to find others. In total, we examined more than 30 collection agencies. 

We narrowed down the list based on different use cases and the criteria listed below. Our research included reviewing each provider's website and comparing services and prices, as well as studying user reviews. We posed as business owners and contacted customer service and sales representatives to better understand the quality of service and learn further information we couldn't find online. 

We eventually cut our list down to 17 contenders for our best picks: Account Management Systems; Alexander Miller & Associates; Aspen National Collections; Benjamin Michael & Associates Inc.; Credit Management Company; Martini, Hughes & Grossman; National Service Bureau; Prestige Services Inc.; Rapid Recovery Solutions; Rocket Receivables; Rozlin Financial Group; Summit Account Resolution; The Kaplan Group; Tucker, Albin & Associates; Vengroff Williams Inc.; and Your Collection Solution.

We based our final decisions on these factors:

  • Rates and contracts 
  • Service limitation 
  • Skip-tracing services 
  • Litigation services 
  • Reporting
  • Online features  
  • Locations services available 
  • Industries served 
  • Customer service 
  • Better Business Bureau ratings and accreditations 
  • Customer reviews and complaints

What to Expect in 2020

In 2020, the state of the collection agency industry is expected to evolve in more ways than one. With the increase in the cost of payroll and decrease in commission rates, many agencies are struggling to stay afloat. This leaves room for several acquisitions, mergers and closures. To stay competitive, many agencies are diversifying the types of debt they collect. This will benefit businesses that are owed more than one debt type.    

Federal rules and regulations regarding the collection industry are tightening as well. Business owners need to be attentive to the changes to ensure the collection agency they've hired is adhering to current laws and regulations.  

In late 2019, the U.S. Court of Appeals' ruling against the Consumer Financial Protection Bureau made it illegal for agencies to send pertinent consumer collections information through indirect electronic means, like hyperlinks. When contacting consumers, debt collectors are legally required to clearly disclose who they are, on whose behalf they are collecting and how much money is owed. 

April 2020: As the coronavirus pandemic wears on, both federal and state governments are questioning how much work collection agencies should be doing to collect payments. At the federal level, Ohio Sen. Sherrod Brown has introduced an amendment to the Fair Debt Collection Practices Act to provide consumers some relief from collection agencies during major disasters, such as the current pandemic. If passed, the bill would limit the amount of work collection agencies could do to collect payments.

Some states are taking matters into their own hands. For example, Massachusetts has banned debt collectors from making collection calls, filing new collection lawsuits, garnishing wages or properties, and repossessing vehicles for three months or until the state of emergency is over. In Illinois, the Department of Financial and Professional Regulation is urging collection agencies to work with consumers to create accommodating payment schedules or eliminate collection for 60 days.

May 2020: In addition to phone calls, debt collection agencies are turning to courts to help them collect on past-due funds. The Pew Charitable Trusts reports that over the past decade, collections suits rose from 1.7 million to 4 million, and debt lawsuits increased from 1 in 9 civil cases to 1 in 4 by 2013. The Consumer Financial Protection Bureau found that 15% of Americans said they were sued by a debt collector.

As more debt collection agencies seek out new ways to collect the funds they are owed, it is reasonable to expect that this wave of lawsuits, which appears to be working for collection agencies, will not only continue but increase.

Skye Schooley: Staff
Skye Schooley,
business.com Writer
Skye Schooley is an Arizona native, based in New York City. After receiving a business communication degree from Arizona State University, she spent nearly three years living in four states and backpacking through 16 countries. During her travels, Skye began her blog, which you can find at www.skyeschooley.com. She finally settled down in the Northeast, writing for business.com and Business News Daily. She primarily contributes articles about business technology and the workplace, and reviews remote PC access software and collection agencies.

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Hi Lamar, I also have a business that deals with residential customers. I agree with David: if you can't get them to pay on time, then you won't ever be able to collect a penalty, no matter how carefully you spell it out ahead of time. We require payment at the time of service (they can put it on a credit card). Still, sometimes people aren't there so we call them to remind them that they owe and that we expect to collect the next time. If they aren't there the next time then no...
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Lynda Colter-Bergh
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I'm going to assume you've already set up payment parameters. I like the suggestions of payment upon receipt with a service fee for 1-15 days and a larger fee for anything after. At this point, you are probably at the point of pulling your hair out with either chronically late payers, businesses with cash flow problems, or someone (call me cynical) taking advantage of you. For these already in motion, consider making sure you have excellent merchant services rates (make sure you have...
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How can I get paid more promptly?
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Katherine Bunschoten
Katherine Bunschoten
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I would recommend keeping a deposit or retainer on file in the form of a time block, or other "prepaid" service. With the payment history, you have the justification in that their credit record is not established at this point to support billing in arrears. When the account on file reaches a minimum balance, you can request that it be replenished. This way, instead of continually running after funds, you have an established credit policy, funds on file, and can forward time or service...
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Michelle Plasz
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Steve Smith
Steve Smith
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Diane, its been my experience that when a client starts to feel that a service they are paying for does not have the value they expected, they tend to think that they can get away with not paying. I do lots of business long distance and have never had a client not pay becasue they were in Canada and I am in So. Cal. Here are a few 'best practices' for insuring you get paid: 1. Make sure the client understands your billing practices. Explain it to them verbally in addition to putting...
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Amara Rose
Amara Rose
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Hello Daniel ~ While I am not familiar with UK law, I will tell you that here in the States, having a signed contract is no guarantee of payment. The only time in my long career as an entrepreneur that I could not get final payment from a client, I HAD a signed contact! After numerous attempts, both by email and phone, I decided to turn the account over to a collection agency. They agreed to take the assignment, and I agreed to the 60/40 split (60% to me, 40% to them) when they recovered the...
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