Debt Collection and Mercantile Agents

Companies hire business entities or debt collection/ mercantile agents to get back the payments that the outside parties owed to them. Most collection agencies or agencies act on behalf of the creditor and collect their debts for a fee or a certain percentage of the amount collected. There is a stringent rule prescribed by various countries to govern and maintain some integrity regarding such agents. Once the punishment of debtors prison were removed, creditors had no strong recourse against such defaulters and in cases where there were no collateral involved, this was the only way they could retrieve back their payments. 
 
Material information about mercantile agents:
Debt Collection and Mercantile Agents
  • Companies hire debt collection agents as their employees or set up a subsidiary unit for them who are dedicated staffs that work against the company’s delinquent debtors. These are known as first party agencies. Since they are a part of the company, they are not subjected to State laws.
  • Once the officials are unsuccessful, third party agencies are hired to recover the debt.
  • Few debt collecting services purchase the account receivables from the companies and pay them for the amount after deducting some amount as their commission. The company is not liable if the debtor completely defaults and there is no scope of recovery.
  • These days international debt collectors are also employed who are able to speak different languages and also has knowledge about legal system of other nations which would help them to recover money.
Advantages of hiring a mercantile agent:
  • These agents who work on commissions and are highly motivated to persuade the debtors to pay. 
  • These agents are experienced in this particular field and they have the best techniques which would coerce the debtors to pay.
  • Hiring these agents on your behalf eradicates the legal risks associated with attempting for debt collection on your own. There are myriad laws that govern the debt collection agencies.
  • These agents offer you the flexibility by offering you a program that fits the company’s business model.
  • They document each and every communication with the debtor. Every notice to the debtors are recorded and filed for future use.

Debt Collection and Mercantile Agents related information

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