Portfolio recovery involves purchasing delinquent debts at a discounted price and attempting to collect the money from the original debtor. Companies in this business, known as debt buyers, acquire unpaid accounts from original creditors like banks and utility providers. They then analyze the debt, verify its validity, and establish communication with the debtor to negotiate repayment options.
Collection efforts may involve persistent communication, debt settlements, and even legal measures like wage garnishments. If unsuccessful, the debt may be written off or sold to another collector. Unlike debt collection agencies that work for original creditors, portfolio recovery companies buy older, charged-off debts and manage them independently. Business process outsourcing (BPO) companies often support these recovery efforts through back-office tasks.
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