Debt Collection AgenciesPosted by: Kim Sears | Posted on: February 12, 2021
Debt collection is the procedure of following up payments of delinquent debts owed by people or businesses to banks or other financial institutions. An agency which specializes in debt collection is sometimes called a debt collection agency or debt collecting agency. These firms purchase delinquent debts from debtors, and try to recover as much of the outstanding debt as possible by employing aggressive tactics like calling, sending letters and making public announcements to encourage the debtor to pay. Debtors are encouraged to negotiate with these debt collection agencies to reduce the debt balance and interest rate. If you would like to learn more about this, please check out view publisher site.
The main goal of debt collection agencies is to collect on the debt owed to the original creditor. However, they do this in ways which are lawful. In cases where the original creditor has given express permission for the debt collection agency to contact and collect, the collector may not violate the rights provided by such written authorization. Otherwise, the rights provided by the law will be violated and the collection act would become ineffective and ineffectual. Some states have laws which allow the debt collectors to contact and collect without the consent of the original creditor or consumers.
Debt collection agencies are careful to follow the Fair Debt Collection Practices Act. The Fair Debt Collection Practices Act outlines the criteria which debt buyers must follow to contact and collect debts owed to creditors, which includes, notifying the original creditor of the debt; is providing the original creditor with a copy of the account and all of the supporting documents relating to the account; and is instructing the debt purchaser not to contact the consumer for a specified amount of time after receiving the account or documents. Other Federal Laws that may apply to debt purchaser programs include the Fair Debt Collection Practices Act, the Fair Credit Billing Act and the Truth in Lending Act.