All debt purchasers are collectors. They get the same rights as the original creditor when they buy the debt-sometimes as low as 25 cents on the dollar. I believe the theory is called “holder in due course” meaning they now own the debt and can collect on their terms and even repossess if the loan is secured.

Debt collectors often purchase debt from the original creditor. They pay pennies on the dollar, and profit from the difference between what they paid and what they collect.

Sometimes, debt collectors are just under contract with the original creditor, so they just collect the money and make a commission.

And the other type of debt purchaser are the purchasers of good debt. Student loans, mortgages, and sometimes even car loans are purchased by anther creditor, and the payments are just made to the new lender.

Often they are the same.

Some collection agencies work for the original creditor and get paid based on a percentage of what they collect.

Most collection agencies purchase bad debt and keep whatever they can collect. The older the debt, the more likely the collection agency purchased the debt.

A debt purchaser “buys” the debt from the original creditor for a certain amount on the dollar. For instance I may buy a $100 debt for 10 cents on the dollar, and IF I collect I earn $90, the original creditor claims the $90 as a business loss. A debt collector is paid the same way, however only if the debt is collected and usually for less profit, a $100 debt may only pay a debt collector $40…these are not actual figures, they vary greatly from business to business. Both debt purchasers, debt collectors, and the original creditor are bound by collection laws. Such as the time of day they can call, not calling you at work, not bad-mouthing you to your neighbors, just to to name a few. You can contact your local Attorney General to get all the regulations that protect you.

a debt purchaser is someone who buys debt from bigger companies who dont think it worthwhile chasing it

for example they will buy 10,000 dollars of debt for 5,000 dollars , the company they bought the debt from gets some of there money back and the problem now goes to the debt purchaser to chase after the debt

they will now get in touch with a debt collector and offer them a percentage of the money to collect the debt

its also a way of big companies not looking heavy handed as its not seen to be them that is now chasing the debt

hope that makes sense

all the best
Ian