What is a Collection Agency?
A few creditors will really utilize a different organization name, address, and telephone number for their inside collection offices, with a specific end goal to give the impression of an "outside" office, on the notion that account holders will consider it more threating. This procedure is for the most part just utilized when the obligation is 6 months or less delinquent.
Nonetheless, most collection movement is performed by thirdâparty collection offices, which are in no way connected to original owner of the debt, and "work" debts for different finance companies. They may likewise purchase delinquent obligations which have been assigned as chargeâoffs by the debt originator.
How they get paid
Collection companies purchase large amounts of charged off debt. Once the debt is sold the person that owes the debt may now be obligated to the new owner of the debt. These types of accounts in many cases have a low collection rate so the collection company buy these debts for pennies on the dollar. This thirdâparty collection organizations are commission based, where they get a percentage of the of the total amount they are able to collect. Collection agents are frequently paid a low wage in addition to commissions based on their performance
Now that we understand a little about what a collection agency is let’s talk about what your options are for dealing with them IF your ever in collection.
5 Tips for dealing with Collection Agency’s
- Avoid Debt Collection Altogether. If you’re having trouble paying the debt talk with the original creditor BEFORE it gets turned over to a 3rd party collection company to see if a payment arraignment can be made.
- Learn your Rights! The Federal Trade Commission FTC website has many resources available for you to learn what your rights are and to assure that the collection company that your dealing with is not violating your rights per the FDCPA.
- Don’t ignore the situation. If you are receiving letters in the mail or debt collectors, phone calls, court summons you have options. Forcing the collection company to validate the debt and prove that they legally own the debt is the first approach. Sending the collection company, a debt validation letter with in the first 3o days of receiving a collection notice will suspend all activity on the collection account. The collection company is now required to validate the debt with appropriate documents.
- Document your dealing with the collection company. It’s important to archive all mail correspondences with a collection agency as well phone communication. When documenting phone calls include times, dates and names of who you spoke with.
- Get it in writing. If you come to an agreement with a collection agency, make sure BEFORE you send them any money that you get your agreement in writing.
They are several strategies for dealing with collection agencies. The best advice is DON’T bury your head in the sand. Seek out the advice of a professional and a least understand what your options are that way you can choose the best course of action for your particular situation.
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