Debt collection has deep roots in history, perhaps along the same time when money was invented. The rules of debt collection remain largely unchanged, with things like honoring one’s commitment to pay within a certain period of time. With many more commercial transactions today, however, debt collections have branched out to commercial debt collections and consumer debt collections – what are the differences between the two?
In a nutshell, commercial collections are aimed toward recovering unpaid business invoices owed to another business. Consumer collections, on the other hand, are made when a consumer owes a debt to a specific business.
Commercial collections are different from consumer collections in a number of ways. Agencies conducting them are not governed by the Fair Debt Collection Practices Act or the FDCPA, although they may be required to be licensed in the state where they operate. Their work involves a larger expected payment, where an unpaid commercial invoice could affect the cash flow or very survival of a business. Their collection efforts, too, involve communications with the accounts payables department of a firm and also potentially an escalation to a credit manager.
Consumer collections govern business to consumer (B2C) relationships, and also differ in some ways. Their agencies are regulated by the FDCPA, limiting the ways their representatives are able to connect with consumers to facilitate payments. Their efforts involve tracking down the debtor to fulfill his or her obligations, and the amount of the debt may be much smaller than what’s owed in business to business (B2B) transactions.
Brennan & Clark LLC is a business collections agency offering customized receivables support solutions that enable businesses to eliminate credit losses. Its expertise helps companies achieve well-defined goals for their collection process, evaluate all internal procedures, implement improvements, and guarantee better results on collections. Read more on this page.In a nutshell, commercial collections are aimed toward recovering unpaid business invoices owed to another business. Consumer collections, on the other hand, are made when a consumer owes a debt to a specific business.
Image source: CreditCards.org
Commercial collections are different from consumer collections in a number of ways. Agencies conducting them are not governed by the Fair Debt Collection Practices Act or the FDCPA, although they may be required to be licensed in the state where they operate. Their work involves a larger expected payment, where an unpaid commercial invoice could affect the cash flow or very survival of a business. Their collection efforts, too, involve communications with the accounts payables department of a firm and also potentially an escalation to a credit manager.
Consumer collections govern business to consumer (B2C) relationships, and also differ in some ways. Their agencies are regulated by the FDCPA, limiting the ways their representatives are able to connect with consumers to facilitate payments. Their efforts involve tracking down the debtor to fulfill his or her obligations, and the amount of the debt may be much smaller than what’s owed in business to business (B2B) transactions.
Image source: Money-Finance.net
