A collection agency is a business that specializes in recovering unpaid debts on behalf of creditors. When individuals or companies fail to pay their bills, creditors may hire a collection agency to pursue the outstanding amounts. These agencies use various methods to contact debtors and encourage them to settle their debts. Collection agencies typically charge a fee or take a percentage of the amount collected. They may work with different types of debts, including credit card bills, medical bills, and loans. The goal of a collection agency is to help creditors recover their money while adhering to laws and regulations governing debt collection practices.