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What is Collection Agency Agreement?
Collection Agency Agreement A Collection Agency Agreement governs the collection of debts on behalf of creditors, specifying collection methods, fees, legal compliance, and responsibilities of the collection agency.
Sample template:
Collection Agency Agreement
This Collection Agency Agreement (the "Agreement") is entered into as of [Date], by and between Apex Financial Services LLC, having its principal place of business at [Address] ("Creditor"), and FastTrack Collections Inc, having its principal place of business at [Address] ("Agency") (together referred to as the "Parties").
1. Appointment and Scope of Services
1.1. Appointment
Creditor hereby appoints Agency to collect on behalf of Creditor certain delinquent accounts, debts or claims stated in the Schedules attached hereto (collectively, the "Debt" or "Debts"), and Agency accepts such appointment upon the terms and conditions stated herein.
1.2. Collection Efforts
Agency shall use its best efforts to collect the Debt, including, but not limited to, telephone calls, letters and notifications, skip-tracing, and legal action if authorized by Creditor, and adherence to all applicable federal, state, and local laws and regulations.
2. Fees and Expenses
2.1. Collection Fees
Creditor shall pay Agency a fee for Services rendered equal to [percentage]% of the principal amount collected on each Debt (the "Collection Fee"). Collection Fee shall be calculated on amounts actually collected from Debtors and received by Agency.
2.2. Expenses
Agency shall bear all costs and expenses related to its collection efforts, including, but not limited to, phone calls, postage, and stationery, unless otherwise agreed in writing by the Parties.
2.3. Legal Fees
In the event that legal action is necessary to collect any Debt, Creditor hereby agrees to pay any court costs, filing fees, attorney's fees, or other associated costs incurred by Agency, subject to Creditor's prior written approval.
2.4. Invoices
Agency shall provide Creditor with monthly invoices indicating the total amount of Debts collected and the corresponding Collection Fees due from Creditor to Agency.
3. Legal compliance
3.1. Agency's Compliance
Agency shall comply with all applicable federal, state, and local laws and regulations governing collections agents in the United States, including, without limitation, the Fair Debt Collection Practices Act (FDCPA), the Fair Credit Reporting Act (FCRA), the Telephone Consumer Protection Act (TCPA), and any state-specific regulations.
3.2. Licenses and Insurance
Agency warrants and represents that it holds any and all necessary licenses and permits required for carrying out its business activities under this Agreement, and maintains adequate insurance coverage consistent with industry standards.
4. Responsibilities of Collection Agency
4.1. Standard of Care
In performing the Services under this Agreement, Agency shall exercise the highest degree of care and skill comparable to that of a professional in the same industry.
4.2. Record Keeping and Reporting
Agency shall maintain accurate and complete records of all communications and actions taken in the collection of Debts, and shall provide regular reports to Creditor with the status of all collection efforts, including a monthly summary of collections, recoveries, payments, and Collection Fees.
4.3. Confidentiality
Agency shall maintain the confidentiality of all information received from Creditor pertaining to the Debt, and shall not disclose such information except as required by law, or with the prior written consent of Creditor.
5. Termination
5.1. Termination for Convenience
Either Party may terminate this Agreement at any time, with or without cause, upon 30 days' written notice to the other Party.
5.2. Termination for Breach
If either Party breaches any material provision of this Agreement and fails to remedy such breach within 30 days of receipt of written notice of such breach from the non-breaching Party, the non-breaching Party may, without prejudice to any other rights or remedies it may have, terminate this Agreement immediately by giving written notice thereof to the breaching Party.
6. Miscellaneous
6.1. Governing Law and Jurisdiction
This Agreement shall be governed by and construed in accordance with the laws of the United States and the state in which Creditor's principal place of business is located, without regard to principles of conflicts of law. Any dispute arising out of or in connection with this Agreement shall be subject to the exclusive jurisdiction of the courts located in said state.
6.2. Notices
All notices required or permitted under this Agreement shall be in writing and deemed given when: (i) delivered personally, (ii) sent by confirmed email or facsimile, (iii) sent by overnight courier, or (iv) three days after mailing by certified or registered mail, postage prepaid, return receipt requested.
6.3. Entire Agreement
This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior or contemporaneous oral or written agreements or understandings. This Agreement may be amended only in writing, signed by both Parties.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.
Apex Financial Services LLC FastTrack Collections Inc
By: _____________________ By: _____________________
[Name, Title] [Name, Title]
Main Sections of a Collection Agency Agreement
In this Collection Agency Agreement, you will see the following sections:
- Appointment and Scope of Services
- Fees and Expenses
- Legal Compliance
- Responsibilities of Collection Agency
- Termination
- Miscellaneous
About each Section - Analysis and Summary:
- Appointment and Scope of Services : This section explains that the Creditor (Apex Financial Services) hires the Agency (FastTrack Collections) to collect overdue debts on their behalf. The Agency agrees to use various methods, such as phone calls, letters, and legal action (if authorized), to collect these debts while following all applicable laws and regulations.
- Fees and Expenses : This section outlines the fees and expenses involved in the agreement. The Creditor will pay the Agency a percentage of the collected debt as a fee. The Agency will cover its own costs, such as phone calls and postage, unless otherwise agreed upon. If legal action is necessary, the Creditor will pay court costs, attorney's fees, and other related expenses, subject to their approval. The Agency will provide monthly invoices to the Creditor.
- Legal Compliance : The Agency must comply with all federal, state, and local laws and regulations related to debt collection, such as the Fair Debt Collection Practices Act (FDCPA), the Fair Credit Reporting Act (FCRA), and the Telephone Consumer Protection Act (TCPA). The Agency must also have the necessary licenses and insurance coverage for its business activities.
- Responsibilities of Collection Agency : This section outlines the Agency's responsibilities, including maintaining a high standard of care and skill, keeping accurate records of collection efforts, providing regular reports to the Creditor, and maintaining the confidentiality of the Creditor's information.
- Termination : This section explains how either party can terminate the agreement. Either party can terminate the agreement with 30 days' written notice for any reason. If one party breaches the agreement and does not fix the issue within 30 days of receiving written notice, the other party can terminate the agreement immediately.
- Miscellaneous : This section covers various additional terms, such as governing law, jurisdiction, notice requirements, and the fact that this agreement is the entire agreement between the parties and can only be amended in writing with both parties' signatures.
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