{"id":4478,"date":"2017-01-24T15:21:22","date_gmt":"2017-01-24T20:21:22","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/business-finances\/what-is-a-commercial-collections-agency.html"},"modified":"2025-01-13T15:15:33","modified_gmt":"2025-01-13T20:15:33","slug":"what-is-a-commercial-collections-agency","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/business-finances\/what-is-a-commercial-collections-agency.html","title":{"rendered":"What is a Commercial Collections Agency?"},"content":{"rendered":"\n
\n \n
\n

What Is a Commercial Collections Agency? <\/h1>\n
\n
\n

Created by FindLaw’s team<\/a> of legal writers and editors<\/i><\/p>\n\n | Last updated\n

\n

Editorial Note: We earn a commission from affiliate partner links on FindLaw. Commissions do not affect the editorial integrity of our legal content.<\/p>\n\n <\/div>\n \n

\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
\n

This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
\n

The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

A commercial collections agency is a specialized organization that assists businesses in recovering unpaid business-to-business (B2B) debts. Unlike consumer collection agencies, which focus on individual debts, commercial collections target debts between businesses. These agencies step in when internal efforts to collect overdue payments from other companies have failed.<\/p>\r\n

While not governed by the Fair Debt Collection Practices Act<\/a> (FDCPA), commercial collections are subject to state laws and may require licensing. The process includes pre-collection assessments and strategic debt recovery phases to maximize success while maintaining professional relationships. Services may include flexible payment plans, credit reporting, and specialized industry strategies.<\/p>\r\n

Understanding Commercial Collections<\/b><\/h2>\r\n

For many businesses, particularly small business owners and medium-sized enterprises<\/a>, managing accounts receivable can be challenging. This happens when customers fail to pay their dues. These agencies step in when internal collection efforts are unsuccessful and assist businesses facing challenges with unpaid accounts.<\/p>\r\n

Commercial collection companies focus particularly on recovering B2B debts, which distinguishes them from consumer collection agencies. A commercial collection organization collects from other businesses that failed to pay on accounts. Meanwhile, consumer collection agencies pursue individual consumer debt owed to businesses. These agencies comprise third-party contractors. Often, they only get paid when they collect on the debt<\/a>. They are different from the typical small business employees or creditors.<\/p>\r\n

B2B Commercial Collection Regulations and the FDCPA<\/b><\/h2>\r\n

Consumer collection tactics are highly regulated. Congress implemented the Fair Debt Collection Practices Act<\/a> (FDCPA). It is a federal law that restricts the manner of individuals’ debt collection and it eliminates the abusive practices of third-party debt collectors.<\/p>\r\n

Yet, the FDCPA does not apply to commercial debt collection. This means debt collectors can implement practices otherwise banned by the FDCPA in their commercial debt collection activities.<\/p>\r\n

Are Commercial Debt Collectors Regulated?<\/h2>\r\n

No. Rules exist, but they come from state laws and regulations. For instance, some states require a commercial debt collector<\/a>‘s license. Others require a bond before performing any collection activities within the state. Typically, the debt-collecting agency should do the following:<\/p>\r\n