: They buy large portfolios of unpaid debts—often credit cards, medical bills, or personal loans—from banks and original lenders.

: These act as investors who purchase portfolios but outsource the actual collection work to third-party agencies or law firms.

: Profit is generated by the spread between the low purchase price and the amount successfully collected, minus operational and legal costs. Operating Models

Debt buying companies provide immediate liquidity to original creditors by purchasing delinquent accounts at a deep discount, then attempting to collect the full balance for a profit. Key Business Features