Is a third-party collection agency allowed to collect my debt?

Last updated: 2026-07-11 · Educational content; not legal advice.

Short answer

Yes, a lender may outsource collection, but the third-party agency is bound by exactly the same rules as the lender. SEC Memorandum Circular 18 (2019) applies to financing and lending companies AND to their third-party service providers, so the SEC-registered lender remains liable for its collectors' conduct — it cannot escape the rules by hiring an agency. For credit cards, RA 10870 requires the issuer to notify you in writing before endorsing your account to a collection agency, and the agency still may not harass, abuse, or oppress you. Before paying anyone, ask the agency for proof of its authority to collect and for an itemized Statement of Account.

Primary sources

Frequently asked

Does using an agency let the lender ignore SEC MC 18?

No. SEC MC 18 expressly covers third-party service providers, and the SEC holds the lending/financing company responsible for the acts of its collectors. Outsourcing does not create a loophole.

How do I confirm the agency is legitimate?

Ask for written proof of its authority from the lender (or the deed of assignment if the debt was sold), and an itemized Statement of Account. A collector that cannot show it holds or is authorized to collect the debt has no basis to demand payment.

The agency is not SEC-registered — can it still collect?

A collection agency acting for an SEC-registered lender is bound by the lender's obligations under SEC MC 18. If it operates lawlessly, report both the agency and the principal lender to the SEC; the lender answers for its agent's conduct.