The overwhelming majority of commercial collection agencies are NOT licensed to conduct business in all 50 states.

Lack of sufficient licensure not only severely impedes collection results and efforts but more importantly exposes creditors to potential nuisance litigation and financial liability.

Even if debtors are located within states that do not require collection firms to be licensed, debtors are notoriously transient and frequently relocate in attempts to avoid their obligations.

At last count, 26 states required specific “intrastate” certification, bonding and/or incorporation.

U.S. States in which the Fair Debt Collection Practices Act (FDCPA) Applies to Original Creditors | Brown & Joseph, LLC

U.S. States in which the Fair Debt Collection Practices Act (FDCPA) Applies to Original Creditors

In states with such requirements, it is unlawful for unlicensed collection agencies to make any contact with debtors in any written, verbal or email form. If a debtor or their attorney discovers that an agency is not licensed, a grievance complaint could be filed.

Debtors who are represented by counsel may simultaneously file a lawsuit. In addition to the collection agency being named as the defendant, the creditor themselves are usually named as the co-defendant.

Debtors’ attorneys especially are going to pursue the perceived “deepest pockets.” The creditor is always perceived as having the deepest pockets.

Not only is being subpoenaed embarrassing and a time-consuming administrative nuisance, but there is the potential for enormous financial loss.

Collection agency violations are normally adjudicated by the prevailing laws where the debtor is located. For a plethora of reasons, collection agencies are being sued every day in every state.

Regardless of any collection agency’s certifications and trade association memberships, confirming their licensure must be a priority.

If proper licensure is required when hiring a plumber, those who we entrust with company finance and reputations should obviously be held to a much higher standard.

So why don’t all agencies have sufficient licensure?

Getting licensure is costly.

At the minimum, licensure alone costs over $100,000. This price includes various incidental bonds, setting up respective state incorporations, trust accounts, etc.

For the overwhelming majority of the commercial collection agency community, national licensure compliance is cost-prohibitive.

For Brown & Joseph and our clients, compliance is cost-imperative.

Hiring a collection agency to collect on unpaid accounts is one of the best ways to increase cash flow and reduce company debt.

And since collection agencies specialize in credit management, they can provide valuable advice and support.

Letting a collection agency manage debt will allow a struggling company’s employees to focus on core business activities, instead of trying to manage debt collection efforts.

If your company is struggling with unpaid accounts, give us a call and we’ll see how we can help.


Brown & Joseph has recovered over $2.5 billion in additional revenue for our clients.

We’re confident we can collect more than your current agency. Contact us today and we’ll score your current receivables to see how much more money you could be recovering.

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