Figures from the New York Fed are balances outstanding, not sale prices. Bands cited from DebtMarket’s pricing study are conversation ranges, not offers. This note is education for operating companies and creditors. It is not legal advice.
Some collection agencies only work accounts a creditor still owns. Some buy the accounts, or buy them through an affiliate. Some do both. The contract for a given file says which one it is. The word “agency” on a signature block does not answer the question. The answer is who holds title after funding, and who keeps the money consumers pay.
A placement leaves title with the creditor
On a placement, the creditor still owns the accounts. The agency collects under a servicing or placement agreement, remits what it collects, and keeps a fee. The creditor can recall the accounts. Consumers are hearing from a company that is collecting a debt owed to someone else, which is the second definition of debt collector in 15 U.S.C. § 1692a(6). When the placement ends, the work ends, and the accounts are still the creditor’s.
A purchase passes title at funding
On a sale, the buyer pays a price for the receivables. On this desk, title passes at closing and funding. The buyer keeps what it collects. The creditor has the purchase price. The cut-off date, which is earlier, is the fact date for balances, paid-prior accounts, and deceased status. The 90-day warranty starts after funding. From funding forward, the seller forwards debtor communications and does not keep servicing the accounts.
An agency that buys, and whose principal business is the collection of debts, can still be examined under the principal-purpose definition in the same statute. Owning the debt takes the company outside the “owed or due another” definition, which is the holding in Henson v. Santander Consumer USA Inc., 582 U.S. 79 (2017). It does not, by itself, answer the principal-purpose question. The longer note is FDCPA and Regulation F for companies that buy portfolios.
| Placement | Purchase | |
|---|---|---|
| Title after the contract | Creditor | Buyer, at funding |
| Cash the creditor receives | Remittances, net of the fee | The purchase price |
| Who keeps later payments | The creditor | The buyer |
| Recall | Usually yes, under the placement | Warranty returns, on the terms in the sale agreement |
One status per account
An account that is still placed should not be in a funded sale. Pull the placement, or exclude the account, before the cut-off. Creditors choosing among in-house work, a placement, and a sale can read collect, place, or sell. Agencies that also want to buy, and can fund, start at buyers. The seller’s sequence is how to sell a charged-off portfolio.
Read the forwarding sentence before you sign
On a purchase, the creditor’s collectors have to stop, and mail that still arrives at the creditor has to be sent on. Write that as an obligation with a start date: funding. On a placement, the opposite is true: the agency is the party collecting, and the creditor still owns the paper. Mixing the two sentences in one agreement is how an account gets called by the placement desk and by the buyer in the same week.
A firm that does both should use two contract forms and two tapes. The placement tape stays on the creditor’s system of record. The sale tape is the one with a cut-off date, a bill of sale, and a funding wire. ACA International membership and RMAI certification tell a creditor the firm is in the trade. They do not tell the creditor which of the two contracts this file is. The form does. Creditors comparing the paths can use collect, place, or sell.