Guide
Switching or Recalling Collection Accounts: A Creditor's Guide
Updated October 18, 2026 · CollectionPlacement editorial team
For creditors. You can usually switch collection agencies or recall an account by giving written notice under your agency agreement. Before you do, check the contract for exclusivity, notice periods and fees on recalled accounts. Then ask the old agency to stop collecting, return your file and update any credit reporting. Here's how to handle switching, recalls and the questions that come up after placement. Get matched with a new collection partner, free →
Before you switch: read the contract
Your agency agreement decides how easily you can switch. Before sending a recall notice, find the clauses on exclusivity, notice periods, fees on recalled accounts and direct payments, because they set when you can move accounts and what it may cost. If you're placing for the first time, see how to place an account. Most collection agreements cover:
- Exclusivity. The agency usually has exclusive rights to placed accounts while they're active.
- Term and notice. How long the agreement runs and how much notice you must give to end it or recall accounts.
- Fees after cancellation. Some contracts charge a fee on recalled accounts, or on payments received for a period after you recall them. These are sometimes called tail fees.
- Direct payments. Whether the agency earns its fee when the debtor pays you directly.
- Settlement authority. Whether the agency can accept less than the full balance without asking you.
- Remittance and reporting. How often the agency pays you and reports on accounts.
If a clause is unclear, ask the agency to explain it in writing before you sign, or have an attorney review it.
How to switch agencies, step by step
To switch agencies, recall the accounts in writing under your contract, get a final accounting and credit-reporting clean-up from the old agency, and wait for confirmation before placing them elsewhere. That avoids two collectors contacting the same debtor. To compare replacements, see what a collection agency is and how to check one is legitimate.
- Review your contract for notice periods, recall fees and exclusivity.
- Send a written recall notice listing the accounts, the effective date and your instructions: stop collection, return the file, report the final status of any payments.
- Ask for a final accounting of payments collected and fees taken, and for any money still owed to you.
- Ask the agency to update or delete any credit tradeline it reported for those accounts.
- Wait for confirmation before placing the accounts with a new agency, so the debtor doesn't hear from two collectors.
- Brief the new agency on the account history, including the prior placement and any disputes. For consumer debts, the new agency is a separate debt collector and must give the consumer its own validation information in its first communication or within five days (12 CFR 1006.34), even if the old agency already sent one. Send it accurate balance, payment and dispute history so its notice is right.
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Not legal advice. This page is general information, not legal advice, and laws vary by state and change over time. CollectionPlacement is a referral service, not a law firm or collection agency. Consult a licensed attorney about your situation.
Questions creditors ask
How do I switch collection agencies?
Check your agreement for notice periods, exclusivity and recall fees, then send the current agency a written recall notice listing the accounts and asking it to stop collecting, return your files, give a final accounting and update any credit reporting. Once it confirms, place the accounts with the new agency and share the account history, including any disputes.
Can a bill sent to collections be reversed or withdrawn?
Usually, yes. As the creditor you can generally recall an account from an agency, for example if it was placed by mistake, the customer has paid or you've settled. Your contract may require written notice and may charge a fee on recalled accounts. If the agency reported the account to credit bureaus, ask it to update or delete the tradeline.
What if the debtor pays me directly after placement?
Tell the agency right away and in writing. That way it stops collecting the amount, updates the balance and doesn't misstate what's owed, which the FDCPA prohibits for consumer debts (15 U.S.C. §1692e(2)(A)). Many contracts still give the agency its fee on direct payments made while the account is placed, so check yours.
Will a collection agency settle for less, and do I have to approve settlements?
Agencies often negotiate settlements for less than the full balance, because a partial payment can be better than none. Whether you must approve depends on your contract. Many set a settlement authority, such as a minimum the agency can accept without asking, and require your approval for anything lower. Agree on this in writing before placing accounts.
Will a collection agency accept payment plans on my behalf?
Usually, yes. Most agencies can set up payment plans within limits you agree to, such as a minimum monthly payment or a maximum term. Plans outside those limits generally need your approval. Ask how the agency tracks plans, what happens when a payment is missed, and whether it reports plan status to you.
How often will the agency remit funds and report to me?
It depends on the agreement. Many agencies remit collected funds monthly, net of their fee, with a statement showing each payment. Reporting frequency, online portal access and account-level detail vary. Agree on remittance timing and reporting in writing, and ask whether collected funds are held in a trust account, which some states require.
Will the agency remove the account from the credit report if I recall it?
Ask it to. When an agency stops collecting an account it reported, it should update or delete that tradeline. Furnishers must correct and update information they report when they learn it's incomplete or inaccurate (15 U.S.C. §1681s-2(a)(2)). Put the request in your recall notice and ask for confirmation.
What should be in a collection agency agreement?
A good agreement covers the fee and how it's calculated, exclusivity, the term and how to cancel, fees on recalled accounts or post-cancellation payments, direct-payment handling, settlement and payment-plan authority, remittance timing and trust accounts, reporting, credit-bureau reporting, legal-action approval, compliance and data security responsibilities, and how files are returned when the agreement ends.
Can two collection agencies work the same debt at once?
Generally not, and most agency contracts don't allow it: placement is usually exclusive while an account is active. Two collectors on one debt also risk confusing the debtor, duplicate contact and inaccurate balances. If you want a second agency, recall the account from the first one in writing, wait for its confirmation and final accounting, then place it with the new agency.
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