Collection Agency

When times are hard and particular debts are put on the back burner until times get better, people usually receive a phone call from a collection agency. Things happen and oftentimes people find themselves financially under the weather. Collection agencies are aware of these things and are always open to negotiation. These agencies exist to collect outstanding debts. They can help you understand your payment options and set up a payment plan that will suit you. Collecting outstanding debts is a business and people should be aware that receiving a call from a collection agency is not necessarily a negative thing. The first step to getting a firm hold on your finances is to pay off debt.

There are several different kinds of collection agencies and everyone should be aware of the differences. One kind is directly involved with the creditor. This type is called a first-party agency. Sometimes creditors use a different company name, or a subsidiary company owned by the parent credit company, to collect outstanding credit debt. The other type is third-party collection agency. This kind of collection agency buys the debt from the creditor and seeks to collect the outstanding debt.

Businesses and companies can also go into debt and receive notices of debt collection from an agency. Small businesses often fail and go into debt. Agencies regularly seek out the owner or owners of the small business and negotiate terms of collection.

Debt Negotiation

Collection agencies are always open to negotiate and are willing to offer repayment options to the debtor. Everyone has a unique way they got into debt; no two people are alike. A collection agency can help individuals with their financial planning and the future of their outstanding debt. They can also help a person get out of debt and lead them in the direction of debt counseling professionals.

Collection Agency Regulation

The Federal Trade Commission (FTC) is responsible for setting up the rules and regulations that debt collection agencies must follow to operate within the bounds of the law. Collection agencies primarily contact debtors through telephone, fax, telegram, and/or mail. Threats of violence, misrepresenting the debt owed under question, and implications of criminal behavior or prosecution are illegal.

It is important to note that not all collection agencies operate in a negative manner. Most agencies are reputable, operate in a dignified manner, and can even help a debtor start the process of debt elimination.

According to the FTC, The following conduct is a violation of the Fair Debt Collection Practices Act:

• The use or threat of use of violence or other criminal means to harm an individual, reputation, or property of any person.
• The use of obscene or profane language or language the natural consequence of which is to abuse the recipient.
• The publication of a list of individuals who allegedly refuse to pay debts, except to a consumer reporting agency or to persons meeting the requirements of section 603(f) or 604(3) of this Act.
• The advertisement for sale of any debt to attempt to coerce payment of the debt.
• Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.
• Except as provided in section 804, telephone calls without any meaningful disclosure of the caller’s identity.