# Third-Party vs First-Party Collections *Reviewed 2026-05-15* > Whether you collect in your own name or under the creditor's name changes which rules apply and which licenses you need. Here is the practical difference. ## Third-party collections A separate agency collects accounts in its own name on behalf of the creditor. ## First-party collections Collection happens in the creditor's own name, often early in the delinquency cycle. ## Comparison | Feature | Third-party collections | First-party collections | | --- | --- | --- | | Whose name appears | The collection agency | The original creditor | | FDCPA coverage | Squarely covered as a debt collector | Often outside the FDCPA's collector definition, though state rules can still apply | | Licensing | Collection-agency licensing usually required | Often handled under the creditor's existing authority, varies by state | | Typical timing | Later-stage and charged-off accounts | Early-stage delinquency | | Who staffs it | An outside agency | The creditor's own team or a vendor acting in the creditor's name | ## Which is right for you - Third-party collections: Third-party collections fit a standalone agency that works accounts in its own name, typically later in the delinquency cycle. - First-party collections: First-party collections fit a creditor that wants to resolve accounts in its own name early, before referring aged balances out. Same goal, different rules First-party and third-party collections both aim to resolve past-due accounts, but the regulatory treatment differs. Third-party collectors operate in their own name and fall squarely within the FDCPA's definition of a debt collector, which drives most agencies toward state collection-agency licensing. First-party programs collect under the creditor's own name, frequently earlier in the delinquency cycle, and are often treated differently under federal law. State law still matters in both cases. Many lenders run a first-party program early, then refer aged accounts to a third-party agency. If you are building either model, confirm the licensing posture state by state, because the answer turns on how the activity is structured, not just on the label you use. Our state licensing summaries outline collection requirements by state, and our services cover the filings either model needs. ## Frequently asked questions ### Is first-party collection exempt from the FDCPA? Often, but not always. The FDCPA generally targets third-party collectors, yet the structure of a first-party program and applicable state laws can still create obligations. Review each program with counsel. ### Can one company do both? Yes. Many operations run a first-party program and also take third-party placements. Each activity should be reviewed for its own licensing requirements.