Collection agencies act on behalf of creditors to collect debt when the creditor does not have the time or resources to seriously sue for overdue debt on their own.
Collection agencies specialize in this type of work, which means they have a staff that specializes in debt collection, which includes a wide range of legal and negotiation skills, as well as an efficient collection process. You can also get more information about debt collection at https://www.accessmercantile.com.au/quality-assurance-compliance.
If you, as a lender, hire a debt collection agency, they are responsible for the collection. If the agency is successful in collecting the debt, the agency will usually withhold a percentage of the amount collected as payment for services.
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Debt collection agencies usually don't take on debt. The debtor doesn't actually owe them. Still owed to lenders. However, the collection agency will provide evidence (known as debt validation) that it is authorized to collect debt on behalf of the recipient of the bond.
Sometimes collection agencies buy debt from creditors. However, usually collection agencies only obtain the right to perform the collection process. All debt collection agencies are regulated by federal law and no debt collection agencies are involved or willing to participate in fraudulent debt collection.
However, if they are acting on behalf of a legitimate creditor, they will take all legal steps to compel the recovery of unreasonably overdue bills if need be brought to court on behalf of the creditor.