Purchase of receivables differs from debt collection by a Collection Agency mainly for the ownership of the debt. Other milestones of the process depend on the latter, for example: who is taking the decisions in the collection process, at whose expense the relevant actions are undertaken, and to whom the obligated person pays.

What is the difference between debt collection and purchase of receivables: e.g. Bank receivable?

If the agency collects assigned receivable:
  • The agency is an intermediary in the communication with the debtor
  • The agency requires payment solely at the office/bank account of the Bank
  • The Bank can initiate legal actions in order to collect the debt
If the agency has purchased the receivable:
  • The agency is already a creditor for the debt. The debtor must be notified for the sale of the debt
  • The agency collects the recovery at its own bank account
  • The agency can offer more flexible conditions for the debt payment
  • Through the sale of receivables, the creditor clears the non-performing receivables from its balance sheet and releases internal resources