Some do. But in B2B commercial debt collection, debt purchasing is far less common than contingency-based collection. Understanding the difference matters for creditors choosing between the two.
The agency collects on the creditor's behalf. The creditor retains ownership of the claim. The agency earns commission on amounts recovered. If the agency recovers EUR 100,000 at 20% commission, the creditor receives EUR 80,000. No recovery = no cost.
A debt buyer purchases the claim outright from the creditor at a discount (typically 5-30 cents on the dollar). The creditor receives immediate cash but at a steep discount. The buyer then recovers the full amount for its own account.
Aged claims (12+ months) that the creditor wants off the balance sheet. Large portfolios of small-value claims where individual recovery isn't cost-effective. Creditors who need immediate cash flow rather than uncertain future recovery.
For most B2B commercial claims, contingency collection is superior: the creditor retains the full upside (paying only commission on actual recovery) rather than accepting a steep discount on sale. For a EUR 100,000 claim, contingency might recover EUR 60,000 (minus EUR 15,000 commission = EUR 45,000 net). Debt sale might yield EUR 10,000-30,000 immediately.
Our debt recovery agency with over 21 years of experience provides: Business to Business Collections Services, Legal Debt Collections and worldwide Skip Tracing services.
