A collection broker (also called a debt broker) helps those who own judgments or debts to quickly find the right 100% contingency collection agencies, to enable creditors to get the best chance of getting paid.
There are millions of debts and judgments, and many hundreds of collection agencies, so why should a collection broker be needed? One reason is because a collection broker knows the best collection agencies in every state, and only refers creditors to the best.
Another reason a debt broker is needed is because debts or judgments are not worth a guaranteed amount like gold or money. A debts or judgment's value depends on the debtor and their assets, the economy, laws, and the abilities and location of the collection agency. A debt broker knows the right collection agency for each judgment or debt situation.
One more reason is because collection brokers are reliable and work with volume, and have negotiated discounts for the creditors. Most debts or judgments are never recovered as laws tend to make it difficult to collect from debtors. A collection broker helps to improve those odds, and makes sure the collection agency is licensed in the same state as the debtor's assets.
What does a debt broker do? They answer questions from creditors, and research debtors using public data records, noting all the factors that determine which company is best suited to collect the debt or judgment. Then, they refer the creditor to the right collection agency. A debt broker (and anyone else) should only be paid when the creditor is repaid.
The collection broker is only paid for the creditor's success, so they have the best incentive to choose the best-suited collection agency to maximize the chances of more successful recoveries for each possible judgment or debt.
A collection broker maintains databases of good collection agencies close to the debtors and their assets. For every judgment or debt, the collection broker contacts collection agencies near the debtor's assets, sometimes discussing the debt or judgment with several collection agencies. This is done, usually the same day, without bothering the creditors.
Only after a match of the best collection agency for a particular debt or judgment has been made, the debt broker contacts the creditor. After the collection broker introduces the creditor to a collection agency, the debt broker steps out of the picture. The debt broker then moves on, to help the next creditor.
Note that a debt broker never owns judgments or debts, and collection agencies do not require judgments or debts to be assigned to them, as they work on behalf of the creditors.
A collection broker does not guarantee the performance of the collection agency they recommend, because nobody can predict the future.
Using a debt broker most often costs the creditor either nothing, or at most two percent of what is collected. In return for discounting the rates for the creditors, the collection agencies get pre-screened debts or judgments.
A debt broker performs an important role in helping both creditors and collection agencies increase their chances of getting repaid.
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