The state rule, the city rule, and the one that follows your debtor

Commercial legal placement commonly starts around a $2,500 balance - below that the cost stack usually consumes the recovery. Litigation also changes the economics: an attorney suit fee sits on top of the agency's contingency, and court costs are separate. Ask for the all-in cost at your typical balance before agreeing to litigation as an escalation.

Sometimes - it depends on your contract and state law. Where your terms and conditions provide for collection costs and interest, and the applicable state permits it, those amounts may be added to the claim. That clause is worth having in your standard terms before you need it; ask your counsel to review it.

Sooner than most businesses do. Commercial accounts are commonly reported as around 68.9% collectable at three months past due and around 51.3% at six months, with recovery falling sharply after a year - and the commission rises over the same period. Waiting costs twice. A written escalation ladder with a fixed placement date recovers more than case-by-case judgement.

Potentially, but through agency law rather than the FDCPA. Federal telecom regulators have said a seller may be held vicariously liable under common-law agency principles for calls placed on its behalf, and 23 states extend their own collection statutes to original creditors as well as third-party agencies. The practical answer is to ask how an agency contacts debtors and to verify its licensing before placing accounts.

An agency works your account for a share of what it recovers and returns what it cannot collect - you keep ownership of the debt. A debt buyer purchases the account outright, usually for cents on the dollar, and keeps everything it recovers. For unpaid B2B invoices where the customer relationship may be salvageable, the agency model is normally what businesses want.