How to choose a debt collection agency in California
By Kai Greenspan, Founding Editor · Last updated: September 2, 2026
Where every California debt collector license in force is published: the Department of Financial Protection and Innovation's own Regulated Entities List, free, with a record page per licensee. It is the first check, and the licence number on any collector's letter can be searched on it directly.
Source: dfpi.ca.gov · Last checked: September 2, 2026
The five steps, in order
| Step | What to do, and why it comes in this order |
|---|---|
| 1. Verify the license on the department's own list | California requires a debt collector to hold a license from the Department of Financial Protection and Innovation under the Debt Collection Licensing Act, and the department publishes every license currently in force on its Regulated Entities List, with a record page per licensee. Search the legal name there before anything else, and ask the agency for its license number, which its own letters must display. If the company is absent, ask which exemption it relies on: depository institutions, several other licensed businesses and commercial collection are outside the Act. A blank search is a question, not an answer. |
| 2. Match the agency to your debt type | Consumer debt, owed by individuals for personal, family or household purposes, is federally regulated under the FDCPA, and Civil Code Section 1788.17 makes the federal conduct rules apply to California collectors of consumer debt. Commercial debt sits outside the Debt Collection Licensing Act altogether, which is why a commercial collector can be lawfully unlicensed. Ask which kind of accounts the agency actually works, and whether it holds a California license for consumer collection. |
| 3. Check that the entity on the contract is the entity on the list | California licenses affiliated companies together: under the department’s rules, affiliates may be licensed under a single license, each with its own number on a shared base, such as 10912-00 and 10912-01, while a company licensed alone carries the suffix 99. Groups of a dozen entities share one base number. Make sure the legal name on your agreement is the legal name on the department’s list, with its own license number, rather than a sibling company in the same group. |
| 4. Read the public complaint record in context, and check any certifications at source | Search the agency in the CFPB Consumer Complaint Database and read it the way the CFPB advises: complaints are records, not verdicts, larger agencies naturally accrue more, and what matters is the pattern and how the agency responded. Certifications are checked against the issuing body, never the agency’s own claim. The department’s list also flags whether it has posted actions and orders against a licensee, and each record page links to them. |
| 5. Only then talk fees, and get everything in writing | Most collection work is contingency: the agency keeps an agreed share of what it recovers. No trustworthy public benchmark for the percentage exists, so ask each agency for its rate in writing, by debt age band, and pin down the cases that cause disputes: direct payments made to you after placement, part payments, recalled accounts and legal costs. A California license is not transferable or assigned, so ask who holds it if the agency is acquired. |
Step-by-step list instructions: verify a California license. The ranked list built on these measures: California agencies.
Source: leginfo.legislature.ca.gov · Last checked: September 2, 2026
The questions worth asking before you sign
Once an agency has passed the public checks, the remaining risk lives in the agreement, and the disputes that sour agency relationships are rarely about the headline rate. Ask each shortlisted agency, in writing:
- What is your California license number, and when were you originally licensed? Both facts are on the department’s list, checkable in under a minute, and the number must already be on your letters.
- If you are not licensed, which exemption applies? A genuinely exempt firm can name it in one sentence. An evasive answer to a simple statutory question is itself information.
- Is the company we would contract with the licensee, or an affiliate on the same group license? Groups share a base number; each affiliate has its own number and its own record.
- What is your rate, by debt age band, in writing? Ask about direct payments made to you after placement, part payments, recalled accounts and legal costs, because that is where disputes start.
- Who holds the license if you are acquired? A California license “shall not be transferred or assigned”, so an acquisition does not carry it across.
- How do you train and monitor against the Rosenthal Act? Civil Code Section 1788.17 makes the federal conduct rules apply to California collectors of consumer debt, so the answer tells you how seriously the agency takes the statute you are both standing inside.
Common questions about choosing in California
Does a collection agency have to be licensed in California?
Yes, unless it is exempt. Financial Code Section 100001 says "No person shall engage in the business of debt collection in this state without first obtaining a license pursuant to this division", the division being the Debt Collection Licensing Act. The Act does not apply to depository institutions, to finance lenders, residential mortgage lenders, real estate licensees, rental-purchase businesses and nonjudicial foreclosure trustees, or to the collection of covered commercial debt.
The agency we want to use is not on the list. Is that a problem?
It is a question to resolve before you sign. A bank collecting its own accounts, a licensed lender or a commercial collector can be lawfully absent, and a license that has ended leaves the department's list without a record of why. Ask the agency for its California license number, which its letters must show, or for the exemption it relies on. A firm that is none of the exempt kinds and cannot give you a number on the list has not answered the question.
Why do several agencies share the same first five digits of their license number?
Because the department licenses affiliated companies under a single license. Its rules provide that each affiliate files its own application and the department issues one license listing all the affiliates, each with its own number on a shared base. The entity you contract with should be on the list under its own legal name and number.
Does the license number have to be on the letters sent to our customers?
Yes. Civil Code Section 1788.11 forbids a collector from "Sending written or digital communication to the person that does not display the California license number of the collector, if applicable, in at least 12-point type". If a prospective agency cannot show you a letter template carrying its number, ask why.
Why does every California agency show only a few years of license history?
Because the license is new. The Debt Collection Licensing Act became operative on 1 January 2022 and the earliest licenses on the department's register are dated January 2023, after thirty years in which California required no state license of collection agencies. A short California license history says nothing about how long the agency has been collecting; its founding year is on its profile, and any history on another covered state's register is on that state's page.
Does Debt Collection Index rank California agencies by how much they recover?
No, and no state page on this site does. Recovery rates are self-reported, unaudited and not comparable between agencies, so we do not publish them or rank on them. California agencies are grouped by years continuously licensed on the state list, with every fact sourced and dated, and listed alphabetically within each band.
Related pages
California agencies, ranked
Verified California agencies grouped by years continuously licensed.
Verify a California license
The free five-minute check on the department's own list, and who is lawfully exempt.
California debt collection laws
The license rule and its history, who is exempt, the number on every letter, and the four-year rule, quoted from the statutes.
Choose an agency in Florida
The same five checks, built around the Florida registration.
Choose an agency in Texas
The same five checks, built around the Texas surety bond.