Home

Product and service reviews are conducted independently by our editorial team, but we sometimes make money when you click on links. Learn more.

The Best Collection Agency Services of 2021

By Donna Fuscaldo,
Business News Daily Staff
| Updated
Mar 17, 2021

Here is our guide to choosing the right debt collection agency for your business needs. We break down our best picks and explain legal considerations, risks, and rewards.
Best for Small Businesses
Rates far lower than rivals
Low minimum collection balance
Robust online portal
Best for B2B Collections
Lower rates vs. commercial rivals
Myriad collection services
Ethical approach to debt recovery
Most Affordable
Licensed in 50 states
Low rates for Stage One recovery
No minimum collection balance
Best for B2C
80+ years collecting debt
Diverse approach to debt recovery
Multipronged approach
Here is our guide to choosing the right debt collection agency for your business needs. We break down our best picks and explain legal considerations, risks, and rewards.
Updated 03/17/21

Our FAQs have been updated with answers about hiring an international debt collection agency and if you should hire a debt collector for past-due accounts owing small balances.

  • Collection agencies help business owners recover outstanding debt, taking a percentage of what is recouped.
  • As a business owner, look for a collection agency that charges a fair rate, has a documented high success rate in collecting debt, and does so in an ethical and empathetic manner.
  • We researched more than 30 collection agencies before arriving at four best picks.
  • This article is for business owners who need the help of a collection agency to recoup past-due funds and want to know which one is best for their needs.

Small business owners have a lot to worry about. Getting customers to pay is among the big ones. That's where a collection agency comes in. When searching for one, you need to consider the rates they charge, their ability to recover unpaid bills, the services they offer and the approach the collection agency takes. We did the work for you, comparing more than 30 collection agencies. Here are our picks of the best collection agency services for small businesses.

Find the Right Collection Agency for Your Business

Fill out this questionnaire to find vendors that meet your needs.

Our Reviews

Summit Account Resolution: Best Collection Agency for Small Businesses

Summit AR's rates range from 7% to 50%.
There is a $50 minimum collection balance, which is affordable for most SMBs.
It discourages clients from submitting accounts that are two years or older.

Summit Account Resolution's transparent pricing, low minimum collection balance requirement and variety of service options make it our choice as the best collection agency for small businesses. Summit collects both commercial and consumer debt across the U.S., serving many different industries.

It has some of the lowest rates in the industry, charging as little as 7% for certain first-party collection programs to as much as 50% if it's a consumer collection account. Rates are negotiable. There aren't any upfront fees, nor additional charges for older accounts. The company's pricing is set on a contingency basis. If Summit AR doesn't collect any money, you don't have to pay. To recover debt, it employs several tactics, including skip tracing and litigation services.

Summit AR serves both consumer and commercial customers, and has experience collecting debt from a range of debtors. It employs ethical and empathetic tactics, and strives to treat debtors with dignity and respect. Summit AR's debt recovery rate is 34.8%, but according to the company, there are some cases in which that rate is 80%.

When you become a client of Summit AR, you get access to an account manager. You also get to use an online portal, enabling you to add new accounts and monitor existing ones whether its 12:00 p.m. or 12:00 a.m.

Read Review

Prestige Services Inc.: Best Collection Agency for B2B Collections

PSI is contingency-based. Rates range from 22% to 33%.
If a debtor pays within the first 10 days, PSI doesn't charge you.
It only serves commercial customers.

Prestige Services Inc. (PSI) is our choice for the best B2B collection agency because of its broad array of collection services, transparent pricing and strong customer service.

PSI's rates are lower than competing services and are negotiable on a case-by-case basis. Volume discounts are also available. PSI pricing is contingency-based, which means you don't pay when it fails to recover the debt.

The agency's recovery rate is 38% (based on actual amounts collected), which exceeds the industry average of 20-25%. PSI offers 10-day free demand services and free final-notice forms. It also offers precollection services, post-judgment collection, skip tracing and online status reports. If those efforts fail, PSI can send the account to an attorney in the debtor's area to proceed with litigation. PSI's network of attorneys are all members of the Commercial Law League of America.

Based on our experience, PSI delivers fast, helpful customer service. You can quickly get a representative on the phone who is knowledgeable and more than willing to help.

Read Review

Rocket Receivables: Most Affordable Collection Agency

Rocket Receivables offers flat-rate and tiered pricing.
It's licensed in all 50 U.S. states to recover debt.
For hard-to-collect cases, it splits recovered funds 50/50.

Rocket Receivable is our choice as the most affordable collection agency given its flat-rate plans and tiered services, which makes its services economical for businesses of all sizes.

Its Stage One Fixed Fee Collections option is ideal for small businesses looking for a low-cost way to collect on past-due accounts. Rocket Receivables charges based on the number of accounts you submit. Rocket Receivables charges $21.95 per account for 10 accounts, $17.95 per account for 25, and $14.95 per account for 50 or more.

Stage Two Contingency Collections is designated for accounts that are more than 120 days late. Rocket Receivables splits recovered funds 50/50 with you. (We recommend that you call Rocket Receivables for exact pricing.) For Stage Two, Rocket Receivables relies on its skilled collectors, written demand letters and legal action when necessary. Rocket Receivable has no minimum account balance, zero sign-up fees and no hidden costs.

Rocket Receivables boasts a high success rate of recovering debt, noting its rate is four times the industry average. It has collected more than $6 billion over the past decade and has served more than 60,000 clients. It operates in all 50 states in the U.S. and serves a variety of industries, including banks, municipalities, credit unions, insurance agencies, retailers, manufactures, and education providers, among others.

Read Review

IC System: Best for B2C Collections

IC System has 80+ years of experience collecting debt.
Its Recovery Plus program charges $14.95 per account.
The agency's rates are higher than some rivals.

IC System is our choice as the best B2C collection agency. We selected it based on its decades of experience, transparent pricing and track record of recovering debt. Business owners can tailor their collections with two levels of service and price points that IC System offers.

For easier-to-collect debt, business owners can use the two-stage Recovery Plus program that costs a flat $14.95 per account. IC System send demand letters informing the customer he or she is in collections. If your customer pays, you keep 100% of the money recovered.

For harder-to-collect debt, IC System's Premier Collect Plan, provides credit reporting to the major credit bureaus, credit monitoring, attorney referral services and litigation referral services if legal action is necessary. Customers only pay when money is recovered, and IC Systems' fee is 25% of collections.

IC System has been in business for more than 80 years, which gives us peace of mind that this collection agency knows what it's doing. It also strives to treat people with dignity and respect, to do the right thing, and be proud of how it recovers debt.

Read Review

When to Hire a Collection Agency

Small businesses typically call collection agencies when they've gotten nowhere in their efforts and the debt is getting old. Every case is unique, but below are five signs you need collections help:

  • New customers don't respond to your first attempt to collect the debt. When there's no payment history with the customer, there's a greater chance they'll refuse to pay.
  • You've agreed to a payment plan, but the customer doesn't follow through. Customers who still won't pay after you've worked out a payment plan are more likely to default on their debt.
  • A customer denies the debt is owed. Unless you enlist the help of a collection agency, these debts are rarely recovered.
  • The customer makes unfounded complaints about your business, product or service. Most of the time, these complaints are just an excuse to get out of paying the debt.
  • The customer has a history of financial irresponsibility.

The longer you let outstanding debts go unpaid, the lower your odds are of recouping your money. Most companies send past-due accounts to a collection agency when they are 90 to 120 days past due. If you wait longer than 120 days, you're far less likely to recover the debt.

Before you call in the experts, there are two steps you can take on your own. First, give debtors a few opportunities to pay what they owe. If your phone calls and emails are ineffective, then send a formal demand letter requesting payment.

If the demand letter doesn't get a response, then it's time to get help from a collection agency. They know how to collect debts while adhering to the Fair Debt Collection Practices Act. The agency may recover a portion of what you're owed, if not all of it.

Key takeaway: The best time to hire a collection agency is within 120 days of an account being past due. Before hiring a collection agency, do as much as possible yourself to try to collect the debt.

Pros and Cons of Collection Agencies

There are several reasons why businesses turn to a collection agency for help. Many business owners are strapped for time. They barely have a moment to bill customers, let alone chase down late ones. A collection agency takes that off your hands. Sure, there's a fee, but it's better than getting nothing if you don't collect it on your own.

You also get legal protection when you work with a collection agency. The last thing you want is to face legal action because of the way you attempted to collect debt. A reputable collection agency knows the rules and regulations. You have less chance of being sued if you hire an accredited and highly rated collection agency.

The collections success rate tends to be higher when you work with a collection agency than if you try to collect the debt yourself.

The biggest downside of working with a collection agency is that there is a fee for doing so. You don't get all of the money you are owed, because the collection agency takes a percentage for their efforts. However, it is often better to get some of what you are owed, rather than none at all.

Key takeaway: The benefits of hiring a collection agency are that you don't have to chase down clients, nor do you have to worry about being sued if you're collection tactics are too aggressive.

How Do Collection Agencies Make Money?

There are two main fee structures collection agencies employ: a contingency fee and a fixed rate.

Debt Collection Fee Structures

Contingency Fees

  • Contingency fees are charged as a percentage of the debt collected and are typically negotiable, particularly for accounts that have a significant balance owed.
  • Contingency fees typically range from 20% to 50% depending on the size of the debt and the age of the delinquent account. Some agencies list rates on their websites, but most require you to contact them to get the exact price.
  • It's important when comparing collection agencies to pay attention to the return rate. If you pay a 25% fee on a $1,000 debt and the agency collects only $300, your return is $225. However, if you pay a 35% return rate and the agency collects $500, you reclaim $325. Talk to agencies, but also do your due diligence to see how well an agency performs in recouping debts and what its return rate is.

Fixed Fees

  • Fixed fees aren't very common. With fixed fee collections, you pay upfront and keep 100% of the funds collected by the agency. Collection agencies usually only offer fixed rates when the debt is less than 90 days old. That's because the debt is considered precollections and is easier to recoup than older debt.
  • A fixed rate structure can save you money on collection fees if you're looking for help with newly delinquent accounts.

Small business owners have to consider many elements when shopping for a collection agency. There's more to it than selecting the cheapest option. The collection agency's ability to collect debts and the tactics they employ are just as important as what percentage they keep.

When assessing which fee structure suits your business best, consider the age of the debt, the volume of collections you typically have and the breadth of your accounts.

If you ask for a quote over the phone, ask the agent to email you the quote.

Some agencies will negotiate on pricing.

Key takeaway: Most collection agencies take a percentage of the money collected, but you aren't required to make any upfront payments. Known as contingency pricing, you do not pay unless the firm collects. With a flat-rate pricing model, which isn't as common, you pay a fee per account.

Choosing a Collection Agency

There are more than 4,000 collection agencies in the U.S. While that number can feel daunting ‒ and overwhelming ‒ when trying to find the best collection service for your business, asking yourself these three questions can help you significantly narrow your search to reputable options:

1. Does the collection agency fit your needs?

Focus on the agencies that meet your business's unique needs. A collection agency that goes after B2B debt won't work if your customers are consumers. Second, pinpoint what you want from the agency, and focus your search there. You may, for example, only want collections services, or you may be looking for billing, precollections, credit reporting, and accounts receivables consulting.  

2. Does the agency know your industry?

With so many collection agencies vying for companies' business, they have to find ways to stand out. One way to do this is to focus on specific niches, such as healthcare, insurance, utilities, credit cards or mortgages. For business owners in very specific industries, the experience the collection agency has in the industry should be the deciding factor when comparing two similar collection agencies.

Make sure the collection agency you choose is well versed in state and federal rules governing your industry as well.

3. Is the collection agency reputable?

Reputation is everything. That's particularly true with collection agencies. They are reaching out to your clients on your behalf. If they are rude and unprofessional, it hurts your reputation.

Following these tips can provide some assurance that you that you're hiring a reputable and effective collection agency:

  • Poll your attorney, accountant or business associates to find out what agencies they've used and why. 
  • The Association of Credit and Collection Professionals, otherwise known as ACA International, manages a directory of members that are licensed in your state. ACA International members are required to adhere to specific standards. 
  • The Better Business Bureau manages a database of complaints and rates businesses based on feedback from consumers. If the collection agency has one or two complaints against it, it may not be a big deal, but if multiple complaints say the same thing, it should raise a red flag. 
  • Select a collection agency that is licensed and/or bonded in your state and the states where your customers live. 
  • Check with the collection agency to see that it has errors and omissions (E&O) liability insurance. E&O insurance covers the collection agency from consumer complaints of improper conduct, such as harassment. In many cases, that coverage extends to your business. E&O insurance is not required by federal or state laws, but it's a sign of good faith. 
  • Interview the collection agency. Ask how they handle delinquent accounts, what their success rate is and how they deal with an angry or stubborn client who refuses to pay. You also want to know what tactics the agency employs to recover debt. Get references and check them. If anything doesn't feel right as you do your due diligence, it's probably a sign you'll be better served elsewhere. 
  • Look for properly trained collectors. Agents should be experienced and skilled negotiators. Ask the agencies you're considering whether employees receive regular education and training. 
  • Don't worry too much about size. A large, national firm is not necessarily a better fit than a small, local one. It depends on your needs, the agency's strengths, its reputation, and its track record.

Key takeaway: A collection agency is an extension of your business, so choose carefully. Consider your needs, the industries the agency serves and its approach. You also want to choose a reputable collection agency with a track record of success.

How to Work With a Collection Agency

A collection agency is your partner in recovering debt owed to you. To maximize how much you can recoup, you'll need to work very closely with the agency. The more information you can provide, the better your chances are of getting back the money you are owed.

Here's a list of the information you should have ready when you hire a collection agency.

  • Names, addresses and telephone numbers
  • Cell phone numbers and email addresses
  • Names of the debtor's spouse, friends, relatives and neighbors
  • Information about past efforts collecting the debt
  • Details about the purchase or transaction, including the date, contracts and credit applications
  • Nicknames, maiden names, and aliases

Key takeaway: To help the collection agency you partner with succeed, you have to supply detailed information about the debtors you are seeking payment from.

How Collection Agencies Use Technology to Recover Money

Agencies employ multiple tactics to recover debt; many of these strategies rely on technology. That's even more important as the world becomes more digital. Here are ways that collection agencies are using technology to locate debtors and recoup money owed:

  • Skip-tracing services scan databases, scour the internet and engage in social engineering to find debtors' whereabouts. It requires gathering and analyzing reams of data, including credit reports, credit cards, job and loan applications, criminal background checks, and air travel records, among other things. Not all collection agencies offer this service, however.

  • Artificial intelligence and machine learning are making it easier for agencies to tailor strategies to individual debtors. Collection agencies rely on artificial intelligence to create profiles to better understand the debtor and the right way to resolve the debt. Algorithms can identify the correct medium with which to communicate with the customer, the right tone to use and how much follow-up should be applied.

  • Some, but not all, collection agencies offer customers access to an online portal. With an online portal, you can submit new delinquent accounts, check the status of accounts in collections and run reports to analyze the effectiveness of the collection agency's strategies.

Key takeaway: Collection agencies use technology to recover money for their clients, whether it's skip tracing to find hard-to-reach debtors or artificial intelligence to tailor strategies to individual clients. Many also offer an online portal, where clients can add and track accounts in real-time.

Fair Debt Collection Practices Act

It's easy to be lured by the lowest-cost provider when shopping for a collection agency, but if the company uses dubious methods to collect the debt, it can irreparably harm your business. It can damage your reputation, which limits your ability to attract new customers. Your business could also face litigation if the collection agency's practices are illegal.

All consumer collection agencies are required to adhere to the Fair Debt Collection Practices Act. The law lays out what collection agencies can do and what is illegal when collecting debts from consumers. Here are the major points from the act:

  • Collection agencies are prohibited from calling debtors before 8 a.m. or after 9 p.m., unless the debtor has opted into calls during these times.
  • Collection agencies can't pursue debtors at inconvenient places. If the debtor requests no calls at work, collectors must follow that.
  • If the debtor has an attorney, the collection agency has to contact their legal counsel, not the debtor.
  • Collection agencies are only allowed to contact third parties, including family and friends, once and only to locate the debtor. The agency is not allowed to say if the consumer owes a debt.
  • Collection agencies are required to send the debtor verification of the debt and cannot threaten harm or violence.
  • A collection agency is prohibited from threatening to garnish wages, seize property or employ any legal actions, unless you plan to sue to recover the debt.
  • Debt collectors can't make false statements, including accusing the debtor of committing a crime or posing as an attorney. They are also not allowed to send documents that look like it came from a court or attorney.

The rules of the Fair Debt Collection Practices Act only apply to consumers. Businesses that need help collecting commercial debt should find a collection agency certified by the Commercial Law League of America (CLLA) and is a member of the Commercial Collection Agency Association (CCAA). Like ACA International, both require commercial collection agencies to follow a strict code of ethics and practice proper accounting principles. They are also required to be bonded.

February 2021: The Biden Administration's Consumer Financial Protection Bureau (CFPB) announced it has launched an inquiry into the debt collection practices of Venmo, the digital money transfer service that is operated by PayPal Holdings Inc. At the heart of the inquiry is how Venmo treated customers that owe the company money, even if that debt is due to fraud or a mistake in sending cash. PayPal disclosed in a regulatory filing that it received a "Civil Investigative Demand" from the CFPB "related to Venmo's unauthorized funds transfers and collection processes, and related matters." PayPal said it is cooperating with the inquiry. The investigation underscores a shift in how the CFPB is treating collection tactics.

Key takeaway: The Fair Debt Collection Practices Act aims to protect consumers from overly aggressive collection tactics. It details what collection agencies can and can't do when trying to collect consumer debt.

Community Insights

We interviewed small business owners about what they look for in a collection agency. We probed them about what made them choose one collection agency over the other and what services matter most to them.

Siva Mahesh, CEO of Dreamshala, a personal finance blog for freelancers, advised entrepreneurs and business owners to pay close attention to the agency's track record. Consider the rates, but they shouldn't be the driving factor as to which agency you use.

"It might be worth it to go with an agency that's more expensive if they have a better success rate," said Mahesh. "You ultimately want to maximize your financial recovery, not find the cheapest agency."

Jim Pendergast, senior vice president of altLINE Sobanco, a specialty lending group, advised that business owners and entrepreneurs evaluate the collection agency's style before choosing one.

"Some people opt for a hard-knocks collector, hoping to flush out the debtor's money, but in my experience, this doesn't get good results," said Pendergast. "We look for agencies with a stable operating history and reputation as good as our own. In the long run, collections is about customer service and results; the agency is doing the job right when they're polite and dependable," he said.

Jerry Han, chief marketing executive at PrizeRebel, said he uses Prestige Services because of how it treats customers its recovering debt from.

"When a collection agent disregards a customer's dignity for the sake of collection, it damages [their client's] reputation. When this happens, companies lose the long-term decision of a customer to stay with that company," said Han. 

Han pointed to Prestige's affordable commission rates as a reason for using Prestige for its collection needs.

Key takeaway: Many entrepreneurs and small business owners we talked to said the most important features to consider are the success rate in recovering debt and how the agency treats debtors.

Frequently Asked Questions

Can a business be sent to collections?

Yes, if a business fails to repay what it owes, it can be sent to collections. Businesses are usually given 90 to 120 days to repay a debt. If they don't, the creditor can either sell the debt to a commercial debt collection agency or sue your business.

What is the difference between a collection agency and a debt collector?

To recover delinquent debts, collection agencies may try to reach debtors at their work or home phone number, they will send late payment notices, and they might contact family and associates to verify a debtor's contact information. They may even show up at the debtor's home.

Debt collectors are governed by the Fair Debt Collection Practices Act, a federal law that protects consumers against debt collection abuse. Debt collectors are more restricted in the actions they can take to collect past-due payments. For example, they can only call debtors between 8 a.m. and 9 p.m. and cannot contact debtors at their place of business if the individual has asked them – either verbally or in writing – to cease contacting them there.

Does a small business have any rights under the Fair Debt Collection Practices Act?

Small businesses do not have rights under the Fair Debt Collection Practices Act. However, some state laws protect businesses, and there are actions you can take to defend your rights. For example, you don't have to pay a debt to a collection agency that can't prove you owe them. You can also hire a collection attorney if your business is being hounded by a debt collector.

Why should you outsource your collections?

Time is money, and if you're spending a lot of it chasing unpaid bills, that's less time you can focus on operations. A collection agency is staffed with experienced professionals whose sole job is to get your debt paid.

Using an agency can increase your cash flow, reduce the number of days bills are outstanding, and reduce the costs associated with keeping collections in house, such as money spent hiring staff and the time they spend trying to collect bills. Using a reputable collection agency may preserve your customer relations, because you can avoid awkward conversations with customers that might cause them to switch to a competitor.

What are the pros and cons of hiring a debt collector agency?

Hiring a debt collection agency has four benefits:

  • It enables you to recover past-due bills quicker than you could on your own. Debt collection agencies have many tools to encourage customers to pay their debts promptly.
  • A collection agency takes the pressure off you to awkwardly confront customers about money they owe you. The last thing a business owner wants to do is have an uncomfortable conversation with a customer about an overdue bill. When you hire a collection agency, you don't have to deal directly with the customer; the agency handles it for you.
  • Small business owners who DIY with bill collections have to be careful. If you are too aggressive or use questionable tactics, you could face legal action from the debtor. But if you use a debt collection agency that is well versed in federal and state laws, you won't worry whether you've run afoul of any regulations.
  • A collection agency also frees you up to focus on running and growing your enterprise. The more time you spend chasing payments, the less time you spend engaging with customers or finding new opportunities to expand your operations.

However, there are three drawbacks to using a collection agency:

  • The biggest disadvantage is the cost. Collection agencies charge fees ranging from 20% to 50% of your collections, depending on how much debt you need help with and how old the debt is.
  • Agencies typically don't disclose fees on their websites, which means you have to contact them to determine just how much they charge.
  • You may lose a customer if the agency is too aggressive with them.

When should a small business hire a collection agency?

Small business owners usually seek help from collection agencies when it's 90 to 120 days late. The older the debt is the harder it is to collect.

If you are still unsure, think about how the customer responded in the past to your efforts. If he or she was receptive and made some payments, it may be OK to wait a little longer. But if all your emails, texts and calls go unanswered, it's time to take more aggressive action.

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

The statute of limitations on debt varies from state to state. It can be as short as three years or as long as 15 years.  That doesn't mean they will chase after your customers for more than a decade. The odds of collecting debt get slimmer the older it is. A bill several months past due is harder to recover than one that's 90 days past due.

Are you responsible for a debt you sold to a collection agency?

Once a business owner sells a past-due debt to a collection agency, it is out of their hands. If the collection agency is able to recoup some funds, it then pays its client a percentage of the funds it recovered from the debtor, minus its fees.

Should I Hire a Collection Agency if I Have Small-Balance Accounts? 

While most collection agencies will collect debts over $50, whether you should hire one depends on how many customers owe you money. If it's one or two past-due accounts and it's an occasional occurrence, collecting the debt on your own may be more effective. But if you have a lot of customers who haven't paid their bill in more than 60 or 90 days, it may be worth calling for help. A good debt collection agency is effective at recovering money owed to you and will do it in an empathetic way.

Should I Hire an International Debt Collection Firm?

Collecting debt outside of the U.S. has its own set of rules. Depending on the country the individual or company is based in, you may be prohibited from using recovery tactics that are allowed in the U.S. (or other countries).

International debt collection firms specialize in helping businesses recover money owed to them from individuals (or companies) based outside the U.S. These services know the rules of the countries they're operating in. Reputable ones are licensed and bonded and have good recovery rates. If you have a lot of past due debt from international clients that is getting old, then you may want to consider hiring an international debt collection firm.

What to Expect in 2021

A lot has changed for collection agencies since January. Heading into 2020, the industry was focused on new rules and regulations regarding debt collections, increased competition, and declining commission rates. But then the COVID-19 pandemic occurred, and everything changed.

Like other industries, collection agencies across the country were required to shut down in-person operations, shifting to remote workforces or halting operations altogether.

At the same time, states aiming to protect struggling consumers during the pandemic, limited the work collection agencies can do. Massachusetts, for example, banned debt collectors from making collection calls, filing new collection lawsuits, garnishing wages or earnings, or repossessing property and vehicles. In Illinois, debt collectors must work with consumers to create payment plans that meet clients' financial situations or delay collection for 60 days.

The federal government is also taking steps to limit what debt collection agencies can do during these unprecedented times. A bill has been introduced in the U.S. Senate that, if passed, would only allow debt collectors to communicate with consumers in writing during a major disaster, such as the current coronavirus pandemic. The limitations on collection agencies would last for 120 days from when the president declares a major disaster.

Despite the pandemic, debt collection agencies are still chasing down money owed and could rely on the courts more in the coming years. This spring, the Pew Charitable Trusts reported that collections lawsuits have increased during the past decade to 4 million from 1.7 million in 2013. According to the Consumer Financial Protection Bureau, 15% of Americans said they were sued by a debt collector.

The Consumer Financial Protection Bureau recently sought public comments on proposed legislation that would require debt collection agencies to notify debtors that they can't be sued for an expired debt. However, if consumers make any payment toward their expired debt, that debt is reactivated, and collectors may sue. As of August, when the public comment period expired, the CFPB hasn't made any announcements regarding the proposed legislation. The agency is expected to complete the rule in October 2021.

The Consumer Financial Protection Bureau recently passed a rule expanding the communication tools that collection agencies can use when collecting debt. Now collection agencies can contact debtors via text, email and social media messaging apps. Collection agencies are limited to seven calls per debt, per week and must provide consumers a way to opt out of the texts, emails or direct messages.

Because of these new rules, business owners must be even more careful when choosing a debt collection agency. If the firm is too aggressive, it could hurt your reputation or, worse, get you in legal trouble. Sensitivity is particularly important during the pandemic when millions of people are struggling.

November 2020: The Consumer Financial Protection Bureau recently passed a rule expanding the communication tools that collection agencies can use when collecting debt. Now collection agencies can contact debtors via text, email and social media messaging apps. Collection agencies are limited to seven calls per debt per week and must provide consumers a way to opt out of the texts, emails or direct messages. Because of these new tools, business owners must be even more careful when they choose a debt collection agency to work with. If the firm is too aggressive, it could hurt your reputation or, worse, get you in legal trouble. Sensitivity is particularly important during the pandemic when millions of people are struggling.

January 2021: With consumers and businesses struggling across the country, collection services have become unavoidable as a means for companies to get paid. To protect small businesses in California from contracting with a questionable debt collection agency, the state has enacted the Debt Collection Licensing Act. It requires all debt collectors to be licensed by the state by the end of 2021. It passed in the fall of 2020, with California giving debt collection agencies a grace period. By the start of 2022, the law will be enforceable.

In addition to requiring a debt collector to have a state license, California is launching an online database that consumers and small business owners can check to see if a debt collection company is licensed, if it has faced enforcement actions in the past, or if its license has been suspended or canceled.

Key takeaway: The COVID-19 pandemic has changed the collections industry as lawmakers come up with new ways to protect struggling consumers. However, collection agencies may take debtors to court once the pandemic is contained.

Our Methodology

To determine the best collection agencies for small businesses in 2021, we spent dozens of hours researching the top services. Here is an explanation of our selection process:

Locating the Best Services

To find the best collection agencies for small businesses, we scoured reviews and business websites. We also conducted our own research into the industry. We examined more than 30 collection agencies in all. (See our full list of collection agencies and their websites below.)

Choosing the Best Services

After our early research, we whittled our list down to 17 candidates for our best picks:  Alexander Miller & Associates; American Profit Recovery; Aspen National Collections; BYL Collections; Debt Recovery Resources; IC System; Kearns, Brinen & Monaghan Inc.; Martini, Hughes & Grossman; PSI-Prestige Services Inc.; Revenue Assurance Partners LLC.; Rocket Receivables; Summit Account Resolution; The Kaplan Group; TrueAccord; TSI; Verliance Inc.; and Your Collection Solution.

Researching Each Service

We further narrowed down the list based on different use cases and the criteria we set (see Analyzing Each Service). As part of our research, we reviewed each agency's website, compared services and prices, and read user reviews. Posing as small business owners, we contacted the agencies' customer service and sales teams to gauge the quality of service and obtain more information than was accessible online.

Full List of Collection Agencies

Here is a full list of collection agencies and a summary of what each company claims to offer. This alphabetical list also includes our best picks. 

Account Management Systems – AMS collects commercial debts. Based out of Tampa Bay, this debt collection service collects debts nationwide, charges no upfront or sign-up fees, and only collects money if it recoups your debts. https://www.amscollects.com/ 

Alexander, Miller & Associates LLC – Alexander, Miller & Associates is a national agency that specializes in large-balance collections. It offers demand letters, commercial credit reports, onsite investigations, prelitigation services and skip tracing. The company states that it has collectors who specialize in trucking transportation and freight, wholesale seafood and produce, restaurant supply, and heavy equipment rental. https://www.amafirm.com/ 

American Profit Recovery –  American Profit Recovery serves a wide variety of industries, including small businesses, lawn care/landscaping and banking.  According to the company, its mission is to resolve debt while treating everyone with dignity and respect. It offers clients an online portal to enter new delinquent accounts, monitor progress and get a snapshot of American Profit Recovery's performance. https://www.americanprofit.net/

Asset Compliant Solutions – Asset Compliant Solutions is a commercial collection agency that offers standard collection services as well as 45-day delinquent secured collateral loans, unsecured open and revolving lines of credit, and an online portal. https://www.acs-cam.com/collection 

Atradius Collections – Although Atradius Collections is primarily a U.K.-based commercial collection agency, it also has a base in the U.S. It specializes in multinational accounts and offers collection services to over 30 countries. It has a very high return rate. To get a free quote on pricing, you can access its online portal. https://agora.atradiuscollections.com/us/

Aspen National Collections – Aspen National Collections works with timeshare and education industries, as well as municipalities and utilities, to collect outstanding debts. It tailors its debt collection strategies to each client. This agency's website has an online portal where you can log in and monitor the progress of your past-due accounts. http://aspennational.com/collections/ 

Benjamin Michael & Associates Inc. – Benjamin Michael & Associates is based in New York City. The firm utilizes techniques such as demand letters, skip tracing, and reports on demand to help you recover debt from delinquent accounts. http://www.benjaminmichaelassociates.com/ 

BYL Collections – BYL Collections is a consumer and commercial collection agency that recovers debt in several industries including B2B companies, utilities, e-commerce, direct response marketers and retailers. It offers an array of services, including skip tracing and credit bureau reporting. BYL emphasizes regulatory compliance and continued education of staff and clients.  https://www.bylcollections.com/

Credit Management Company – Founded in 1966, Credit Management Company recovers debts for government, healthcare, higher education, financial services and commercial businessesIt has an online system for debtors to make payments. In also offers claim resolution services. http://www.creditmanagementcompany.com/ 

Debt Recovery Resources – This is a full-service debt collection agency that not only helps recover debts but can help its clients improve their internal debt collection processes. Debt Recovery Resources can manage accounts receivable, perform free legal background checks and find debtors. https://www.debt-rr.com/ 

FCR Collection Services – Powered by FEDChex, FCR Collection Services offers several payment solutions to companies nationally. Its services include check verification, automated clearinghouse, remote deposit capture, electronic payments and risk management. https://www.fcrcollectionservices.com/ 

Hunter Warfield – This collection agency serves a variety of industries, including property management, medical offices, financial services and commercial collections. This collection agency is best suited for businesses that provide credit on goods or services or have extended, relationship-based contracts. https://www.hunterwarfield.com/ 

* IC System – Founded in 1938, IC System is a consumer and commercial collection agency that employs all the advanced tools and techniques to recover money for its clients. IC System collects debt in all 50 states and offers different tier pricing based on the services a business requires. https://www.icsystem.com/

Kearns, Brinen & Monaghan Inc. Based in Greenville, South Carolina, Kearns, Brinen & Monaghan is a full-service commercial debt collection agency serving a variety of industries. It provides clients with an online-portal and access to an in-house team of attorneys. https://www.kbmcollect.com/

Martini, Hughes & Grossman – Martini, Hughes & Grossman offers custom approaches to debt collection. It has in-house legal advisors, uses skip-tracing technology, sends bimonthly status reports, and collects on both B2B and B2C accounts. It can track down debt nationally and internationally and is accredited with the Better Business Bureau. http://mhg.bz/ 

National Service Bureau – National Service Bureau helps with both B2B and B2C collections. It offers precollections, third-party collections, letter services, litigation, and skip tracing to a variety of industries, including commercial, education, financial, insurance, medical, telecom and utilities. http://nsbi.net 

*Prestige Services Inc. – PSI is our choice for the best B2B collection agency. It provides commercial collection services throughout the U.S., Mexico and Canada. It provides professional skip tracing to help locate debtors, and it can investigate businesses. If the debtor won't pay even after all of PSI's efforts, the agency can forward the account to an attorney in the debtor's area. https://psicollect.com/ 

Rapid Recovery Solution – Rapid Recovery Solution provides collection services both nationally and internationally. It caters to all commercial accounts and medical billing accounts, using a four-step system to collect funds from debtors. http://rapidrecoverysolutions.com/ 

Revenue Assurance Partners – Revenue Assurance Partners customizes its service to suit your business. You can outsource as many or as few internal processes as you want. The company states it has over 50 years of experience collecting past-due accounts. It also provides auditing, reporting, legal forwarding and other collection services. https://rapcollect.com/  

*Rocket Receivables – This debt recovery agency supports collections for small and midsize businesses. It focuses primarily on the healthcare, education, professional services, residential, commercial, contracted services, trade and general retail industries. It has fixed fees for newly delinquent accounts and contingency pricing for older accounts. https://www.rocketreceivables.com/ 

Ross, Stuart & Dawson Inc. – This commercial collection agency provides services to businesses throughout the U.S. It can help you with follow-up letters and statements, soft calls, credit reports, and portfolio liquidation services. http://rsdcollects.com/ 

Rozlin Financial Group Inc. – RFGI is our choice for the best B2C collection agency. It uses a tailored approach to connect with debtors, including phone, mail, email and online chat. It serves various industries, including dental and medical offices, hospitals, schools, property management companies, utilities, retailers, and lending service companies (e.g., credit cards, auto loans and mortgages). It is accredited by the Better Business Bureau. https://www.rfgionline.com/ 

Smyyth LLC – Smyyth Collections LLC, partnered with Leib Solutions LLC, is a commercial collection agency that serves a variety of industries, including commerce, property and casualty insurance, health insurance, healthcare, law firms, and CPAs. It provides basic features like first- and third-party collections, collection letters, and call services, plus more advanced techniques like accounts receivable management and revenue cycle consulting. https://www.smyyth.com/solutions/collection-management/ 

*Summit Account Resolution – This agency is our pick as the best collection agency for small businesses, and it serves both consumer and commercial collections. It offers an online portal, a skip-tracing department and litigation services. Once you sign up with this agency, you receive an account manager who is available to answer all your questions. https://www.summitcollects.com/ 

The Kaplan Group – The Kaplan Group is a commercial collection agency that specializes in international, judgment and large-balance claims. It requires a minimum of $1,000 to be collected on and has low contingency rates. It provides advanced collection services, such as background investigations, credit analysis, skip tracing, legal services and payment plans. https://www.kaplancollectionagency.com/ 

TSI – This agency provides collection services for commercial, education, financial, government, and healthcare industries for both SMBs and enterprises. It provides basic collection services like demand letters, calls, and payment reminders, as well as more advanced services, such as first- and third-party accounts receivable management options and skip tracing. https://www.tsico.com/ 

TrueAccord TrueAccord is focused on collecting consumer debt for small businesses. It relies on a mobile-optimized collections system and advanced technology to recover debt for its clients. https://www.trueaccord.com/

Tucker, Albin & Associates – This B2B collection agency has a network of over 500 private investigators and attorneys to help with debt collections across the globe. It uses a tailored approach to collect on commercial debts. http://tuckeralbin.com/ 

Vengroff Williams Inc. – This agency focuses on four specific collection areas: credit to cash, subrogation, revenue cycle management and collections business process outsourcing. It offers services such as first- and third-party collections, nationwide subrogation management, and claim recovery. https://www.vwinc.com/ 

VeriCore – This international collection agency focuses on recovery, reporting and remittance. It takes a tailored approach to each collection account, ranging from soft to assertive. https://www.vericore.com/indexS.htm 

Verliance Inc. – Verliance Inc. is a BBB-accredited collection agency that focuses primarily on the insurance industry. It offers many advanced collection services like first- and third-party collections, benchmarking data, credit checks, delinquency rate modeling, and asset searches. http://www.verliance.com 

Your Collection Solution – This collection agency collects consumer and commercial debts. It has a contingency-based fee structure. Though headquartered in Florida, Your Collection Solution can work to recoup debt in the U.S. and several other countries. The company states its management team has over 30 years of experience in the industry. https://www.ycscollects.com/ 

Donna Fuscaldo
Donna Fuscaldo
Business News Daily Staff
See Donna Fuscaldo's Profile
A lifetime New Yorker, I am a veteran finance and business journalist that has contributed to several national media outlets including Forbes, Investopedia, and Bankrate.com. I have spent my career providing consumers and business owners with advice and guidance to help them navigate the world of finance. As a senior finance writer, I report on all aspects of finance from managing cash flow to choosing the best accounting software.
Image Credit: AndreyPopov / Getty Images
Back to Top
Back to Top