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The Difference Between Commercial and Consumer Debts

Do you have a debt owed to you? 

Do you know if that debt is a consumer debt, or a commercial debt? 

Consumer and commercial debts are often confused. Note that Ross, Stuart & Dawson only collects commercial debt.

Consumer Debt

Consumer debt is defined as "a debt incurred by an individual primarily for a personal, family, or household purpose." It usually involves a business and a consumer. If you’re owed a consumer debt, you may be a business who has provided a good or service to a consumer and they haven’t paid you.

Examples of consumer debt:

  • You’re a hospital looking to collect medical debt from a patient
  • You’re a credit card company and one of your cardholders hasn’t paid
  • You are a landlord seeking late payments from your tenants

Consumer debt collection must follow the Fair Debt Collection Practices Act (FDCPA).

Things consumer debt collectors can’t do under FDCPA:

  • Lie about their identity
  • Harass or threaten the debtor
  • Call the debtor’s friends and family members to help locate them
  • Try to collect more than the debtor owes

Commercial Debt

Commercial debt comes from business-to-business (B2B) transactions. One organization provides a good/service to another organization before receiving payment. If they don’t receive payment, this is a commercial debt.

Examples of commercial debt:

  • You are a manufacturer who creates parts for another company’s products. You create the parts, send them off, and the other company receives them, but they don’t pay you.
  • You work at a radio station and air ads from other businesses. You’ve aired a business’ ad, but they haven’t paid you.
  • You work at an employee staffing company and have provided temp workers to your customer, but you haven’t gotten paid for your service.

Commercial debt collection takes knowledge of multiple industries and how each operates. Commercial collectors don’t necessarily have to follow the FDCPA rules, but Ross, Stuart & Dawson follows them as best practice. It’s important to collect professionally and with kindness to uphold the relationship between the creditor and debtor because the relationship is likely ongoing and usually won’t end once the debt is collected. 

Certified Commercial Collection Agency in Michigan

Ross, Stuart & Dawson is a commercial collection agency in Michigan certified by the Commercial Law League of America (CLLA) and the International Association of Commercial Collectors (IACC).

Creditors can easily place a claim through RSD’s secure online portal, upload supporting documents, keep track of their claim with up to the minute updates, and run and export reports. 

Get the money you deserve! Call RSD for commercial debt collection at 248-370-8160 or fill out a contact form.

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