Who buys debts?
If a creditor sells your debt, it’ll be to a company known as a ‘debt purchaser’. This just means they’re a debt collection agency that buys up debts to collect rather than chasing debts owned by other companies. Some collection agencies may do both.
Creditors will usually sell or ‘assign’ a large amount of debts to a debt purchaser. The debts will be sold at less than their face value, but the debt collection agency is entitled to collect the full balance. This is where their profit comes from.
For example, if a debt of £100 is sold to a collection agency for £70, they’ll try to collect the whole amount and make £30 profit. The amount paid for debts when they’re sold is usually confidential between the creditor and collection agency and it’s unlikely they’ll tell you.
Need help with debts?