This is just hearsay, but I believe I heard a financial person once say that you should avoid, if at all possible, making payments to a collections agency. I’d call your provider and ask them if you can still pay them directly. I’m sure they’d much rather have 100% of the debt rather than having the collections agency take their cut first.
It depends on the contract the original creditor has with the collection agency. In most cases, the OC assigns collection of the debt to the CA, if the CA get paid they keep a portion for thier payment, the rest goes to the OC. Even if you decide to pay the OC instead of the CA, the CA still gets paid. Some contracts between the OC and the CA prevent the OC from accepting payments on assigned debt, the payment must be made through the CA. Also, even if you pay the OC and they accept the payment, the CA can still legally enter adverse info to your credit report.
In other cases, especially older debts, the CA will purchase the debt from the OC, sometimes only pennies on the dollar. The creditor now legally owes the debt to the CA. The OC can no longer collect on the debt or even accept payment.
The forums at Creditboards.com have much more detailed info and the relationships between OC’s and CA’s and how they work.
I own a small business and have a contract with a collection agency. When I send them an account, it is theirs. If I were to accept payment directly from the deadbeat, I would then have to do the math and send the collection agency their cut, typically 60% for recent accounts. Rather than do this, I refuse contact from anyone I have sent to collections.
But the original contract, the original transaction, was between the customer and yourself.
If they finally get around to sending you the check (perhaps with a late fee), they’re making good on their obligations. What is the logic of refusing their payment? And why should they be interested in your separate contract with another company?
The doctor screwed up and sent it to collection while it was still working its way through the insurance system.
Collections didn’t like my request for details about what I believe are bogus charges so they got a lawyer on the case.
Problem is, they all got the amounts wrong (relative to each other) so that I now have three different bills for slightly different amounts with different dates, none of which match what was sent to the insurance company. Collections and the lawyer are like two separate dogs after my leg, neither willing to acknowledge the other. I don’t want to call the lawyer again because she refuses to answer questions, refers to me as “deadbeat” and yells into the phone “I’ll see you in court!”. The collection agent is the one who screwed up the paper work in the first place and it’s useless to call her.
Insurance finally came through with a statement of what I owe but collections and the lawyer both want added “fees and interest.” So, I’m now trying to decide: wait until they take me to court and let the judge sort out the clusterfuck or try to send some money to one of the three parties and hope they will talk to each other.
To the OP, I would say it depends upon the amount. I do know that collection agencies will make deals - they want as much money as they can get for the least amount of effort.
Delinquent accounts are given a last chance to pay me. They are told I am selling the account to a collection agency. They are told I want to do no further business with them. I’m patient, but I have limits.
My business has no billing department. These are checks that bounce and are never made good.
Simple, you make this part of the purchase agreement with the customer. The customer then accepts the fact they will have to deal with a 3rd party collector if they don’t pay on time. I have heard the point you make as an argument in court numerous times, it has never worked when the creditor does the CYA thing as part of the purchase agreement. All states also have laws that allow for the assignment of defaulted debts, that is why there are collection agencies located in every state.
One consideration is your credit report. Often, a collection agency will immediately report you as having an account in collection - that gives them leverage. If you pay the original debtor, then you can pretty much count on having that mark on your report for 7 years.
But you can usually work something out with the collection agency to have them agree to remove the ‘mark’ from your credit if you agree to pay them the debt.
It doesn’t always work like this - but I would consider the credit report impact, whatever it may be, before making a decision.
I had several old medical bills that I paid off last summer. They were old enough that I had to pay the collection agencies.
What’s helpful in paying any medical (or any) debt is to get a paid-in-full letter or receipt from the provider or the collection agency. This is so you have proof that the debt was paid to the creditor’s satisfaction, and that there is nothing remaining on the debt. This is important in case the creditor is slow to remove the debt or change the status to “paid” on your credit report.
That being said, I’ve also paid the provider directly. Again, I got a paid-in-full letter and faxed it to the collection agency, who dropped it like a rock. They weren’t too happy, but screw 'em. I’d rather save my ire for the people who deserve it.