What Does a Debt Recovery Company Do?


Quick Answer

A debt recovery company takes on clients who have debtors with outstanding bills and takes on the task of getting those debtors to pay off their bills. A debt recovery company can benefit its clients by relieving them of the task of debt collection by using time-tested techniques to handle debtors and by collaborating with other helpful service providers, such as attorneys, to aid in debt collection, according to Direct Recovery.

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What Does a Debt Recovery Company Do?
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Full Answer

Debt recovery companies use a combination of postal mail and phone calls to call attention to and attempt to reconcile an outstanding debt. When a company with an outstanding debt closes its doors and becomes difficult to contact, debt recovery companies may employ the services of personal investigators to find current contact information of the officer of the defunct company officially responsible for the unpaid debt and pursue him to recover the outstanding funds, shares Direct Recovery.

Debt recovery companies must adhere to a number of parameters under the Fair Debt Collection Practices Act to keep their practices in step with U.S. law. Federal law bars debt collection companies from, for example, calling debtors before 8 a.m. or after 9 p.m., from using abusive or profane language in the collection of a debt, or threaten a debtor with arrest, states the Federal Trade Commission.

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