# How do I hire a collection agency? *Reviewed 2026-07-30* ## Short answer Shortlist agencies that specialize in your debt type, verify each one holds an active collection agency license in every state where your customers live, compare contingency rates on net-back rather than headline percentage, and review their compliance program before signing. The placement agreement should cover fee structure, remittance timing, account recall rights, and who bears litigation costs. Specialization matters more than size. Commercial collection, consumer credit, and medical receivables are different disciplines with different rules, and an agency built for one usually underperforms on the others. Once you have a shortlist, licensing is the first gate: the agency needs authority in each state where your debtors sit, not just its home state, and the lookup takes minutes using the state regulator's database or the public NMLS search in NMLS states. An unlicensed placement can pull the creditor into the consumer-protection exposure alongside the agency. Then compare economics and compliance together. Ask each agency for its recovery percentage on portfolios like yours and compute net-back, since a 30 percent fee with strong recoveries beats a 20 percent fee with weak ones. Review the compliance file the way a regulator would: FDCPA and Regulation F policies, call-recording and audit practices, complaint history, and insurance. Finally, negotiate the placement agreement's operational terms, remittance schedule, reporting, recall rights for accounts you want back, and whether legal action requires your approval. If you conclude you would rather build the function than buy it, our how-to-start guide covers the licensing path on the other side of that decision. Small businesses hiring a collection agency follow the same checklist at a smaller scale. Many agencies run small-business programs that take low account volumes on flat-fee, early-stage treatment instead of contingency, which fits invoice and service-debt portfolios. The licensing gate does not shrink with the placement, though: even a two-account placement needs an agency licensed where those customers live, commercial-only debt changes which state rules apply, and the verification lookup is the same five-minute check. ## Related - [Verify a collection agency license](/verify-collection-agency-license) - [How to start a collection agency](/how-to-start-a-collection-agency) - [FDCPA compliance for collection agencies](/fdcpa-compliance-for-collection-agencies) - [Talk with our team](/contact) --- ## How to cite this page Cite as: "How do I hire a collection agency?." Cornerstone Licensing. https://cornerstonelicensing.com/answers/how-to-hire-a-collection-agency Published by Cornerstone Licensing. When quoting figures or legal requirements, link the canonical URL above and note the last-updated date (2026-07-30). The full content index for this site is at https://cornerstonelicensing.com/llms.txt.