Debt Consolidation Loans » Debt Collection

Debt Collection Agencies : Understanding a Growth Industry

Aris Munandar — Wed, 09 Jun 2010 16:51:50 +0000

Consumers in the UK collectively owe in excess of £1 trillion according to recent media reports. Much of this debt is due to borrowing on credit cards, bank loans and mortgages; but as consumer borrowing increases, so does the amount of people encountering financial difficulty in paying back what they owe.

As a result, more and more financial agreements are becoming delinquent and are subsequently passed from the original lender to a debt collection agency. Debt collection agencies are businesses that collect past-due bills and accounts receivable for other persons or businesses in exchange for a fee. Collection agencies charge for their services in one of three ways: a flat fee, a percentage of the amount recouped, or more commonly through a direct purchase of the delinquent account.

Attempts to collect small or medium sized debts are best done using debt collection agencies that charge a flat fee for their services. These agencies are likely to work just as hard at collecting a small debt as they are in trying to collect a larger debt.

The third option is rapidly becoming the most popular among the larger financial institutions as they seek to cut their losses and free up resources away from debt collecting. In most cases, these financial institutions have large portfolios of outstanding debt, and selling it on to debt collection agencies allows them to recoup some of the money loaned out and free up costly resources away from chasing the delinquent debt.

In order to collect due debts most collection agencies will use one of three tactics: letters, telephone calls, litigation. Typically, debt collection agencies will begin the collection process by sending a series of notification letters, often allowing the debtor to enter into negotiations to repay the debt. These letters are often called ‘demand’ letters. The final notification letter that is sent out generally warns the debtor that if no contact is made prior to a certain date then the debtor’s name – whether it be an individual or a company – will be passed onto a more intensive method of debt collection.

In addition to letters, some collection agencies might also phone the debtor directly, again allowing the debtor to work with the agency to agree a plan to repay the debt. Telephoning a debtor at home can sometimes have the best results in collecting a delinquent debt. The third method, litigation, is a last resort and is generally only used when all other attempts to reclaim the debt have failed. Litigation involves taking the debtor to a small-claims court and could eventually result in the debtor being made bankrupt, depending on the amount of debt owed.

Other services provided by debt collection agencies include locating absent debtors who can no longer be reached at the address or telephone number listed on their accounts. Some agencies also offer ‘doorstep’ collection, whereby they employ a number of collectors to visit debtors in their homes to arrange the repayment of debts owed.

Debt purchasing is becoming big business in the UK with many specialist debt collection agencies, such as Capquest Debt Recovery, providing advice on how best to proceed with the recovery of unpaid debt. Should you have a need to employ the services of a debt collection agency make sure that they are members of the Credit Services Association, a regulatory body associated with the debt collection and financial industries.

Fair Debt Collection – Know Your Rights!

Aris Munandar — Sun, 23 May 2010 17:16:18 +0000

FAIR DEBT COLLECTION

If you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a “debtor.” If you fall behind in repaying your creditors, or an error is made on your accounts,

you may be contacted by a “debt collector.”

You should know that in either situation the Fair Debt Collection Practices Act requires that debt collectors treat you fairly by prohibiting certain methods of debt collection. Of course, the

law does not forgive any legitimate debt you owe.

This brochure provides answers to commonly asked questions to help you understand your rights under the Fair Debt Collection Practices Act.

What debts are covered?

Personal, family, and household debts are covered under the Act. This includes money owed for the purchase of an automobile, for medical care, or for charge accounts.

Who is a debt collector?

A debt collector is any person, other than the creditor, who regularly collects debts owed to others. Under a 1986 amendment to the Fair Debt Collection Practices Act, this includes attorneys who collect debts on a regular basis.

How may a debt collector contact you?

A collector may contact you in person, by mail, telephone, telegram, or FAX. However, a debt collector may not contact you at unreasonable times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows that your employer

disapproves.

Can you stop a debt collector from contacting you?

You may stop a collector from contacting you by writing a letter to the collection agency telling them to stop. Once the agency receives your letter, they may not contact you again except to say there will be no further contact. Another exception is that the agency may notify you if the debt collector or the creditor intends to take some specific action.

May a debt collector contact any person other than you concerning your debt?

If you have an attorney, the debt collector may not contact anyone other than your attorney. If you do not have an attorney, a collector may contact other people, but only to find out where you live and work. Collectors usually are prohibited from contacting such permissible third parties more than once. In most cases, the collector is not permitted to tell anyone other than you and your attorney that you owe money.

What is the debt collector required to tell you about the debt?

Within five days after you are first contacted, the collector must send you a written notice telling you the amount of money you owe; the name of the creditor to whom you owe the money; and what action to take if you believe you do not owe the money.

May a debt collector continue to contact you if you believe you

do not owe money?

A collector may not contact you if, within 30 days after you are first contacted, you send the collection agency a letter stating you do not owe money. However, a collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.

What types of debt collection practices are prohibited?

Harassment. Debt collectors may not harass, oppress, or abuse any person. For example, debt collectors may not:

l     use threats of violence or harm against the person, property, or reputation;

l     publish a list of consumers who refuse to pay their debts (except to a credit bureau);

l     use obscene or profane language;

l     repeatedly use the telephone to annoy someone;

l     telephone people without identifying themselves;

l     advertise your debt.

False statements. Debt collectors may not use any false statements when collecting a debt. For example, debt collectors may not:

l     falsely imply that they are attorneys or government representatives;

l     falsely imply that you have committed a crime;

l     falsely represent that they operate or work for a credit bureau;

l     misrepresent the amount of your debt;

l     misrepresent the involvement of an attorney in collecting a debt;

l     indicate that papers being sent to you are legal forms when they are not;

l     indicate that papers being sent to you are not legal forms when they are.

Debt collectors also may not state that:

l     you will be arrested if you do not pay your debt;

l     they will seize, garnish, attach, or sell your property or wages, unless the collection agency or creditor intends to do so, and it is legal to do so;

l     actions, such as a lawsuit, will be taken against you, which legally may not be taken, or which they do not intend to take.

Debt collectors may not:

l     give false credit information about you to anyone;

l     send you anything that looks like an official document from a court or government agency when it is not;

l     use a false name.

Unfair practices. Debt collectors may not engage in unfair practices in attempting to collect a debt. For example, collectors may not:

l     collect any amount greater than your debt, unless allowed by law;

l     deposit a post-dated check prematurely;

l     make you accept collect calls or pay for telegrams;

l     take or threaten to take your property unless this can be done legally;

l     contact you by postcard.

What control do you have over payment of debts?

If you owe more than one debt, any payment you make must be applied to the debt you indicate. A debt collector may not apply a payment to any debt you believe you do not owe.

What can you do if you believe a debt collector violated the law?

You have the right to sue a collector in a state or federal court within one year from the date you believe the law was violated. If you win, you may recover money for the damages you suffered.

Court costs and attorney’s fees also can be recovered. A group of people also may sue a debt collector and recover money for damages up to $500,000, or one percent of the collector’s net worth, whichever is less.

Where can you report a debt collector for an alleged violation of the law?

Report any problems you have with a debt collector to your state Attorney General’s office and the Federal Trade Commission. Many states also have their own debt collection laws and your Attorney

General’s office can help you determine your rights.

If you have questions about the Fair Debt Collection Practices Act, or your rights under the Act, write: Correspondence Branch, Federal Trade Commission, Washington, D.C. 20580. Although the FTC generally cannot intervene in individual disputes, the information you provide may indicate a pattern of possible law vi
olations requiring action by the Commission.

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Find the Right Commercial Debt Collection Firm to Recover Your Type of Debt

Aris Munandar — Sun, 18 Apr 2010 11:05:50 +0000

It should be noted that there are many commercial debt collection firms available and while most are more than effective at recovering debt, each firm usually focuses on a specific type of industry or size of company. For instance, if you are owed money from a small business, you might want to talk to a commercial debt collection firm that specializes in these types of company’s. On the other hand if a Fortune 100 corporation owes your company a substantial amount of debt, then a commercial debt collection firm that has experience with large, powerful corporations is ultimately necessary.

Choose a Commercial Debt Collection Firm that is Professional

We have all heard stories of debt collection gone horribly wrong. Even though your business may be in the right, by trying to collect debt with unprofessional techniques, you can not only fail at recovering debt, but do lots of damage to your business reputation as well. Make sure you choose a commercial debt collection firm that is highly professional and knows how to recover debt in sensitive situations. Usually this requires relationship building with those in charge and that have the authority to pay off debt in a company. The right commercial debt collection company can recover debt with minimal ripples keeping your reputation in tact.

Get the Best Service from the Commercial Debt Collection Firm You Choose

Hiring a commercial debt collection firm, while extremely cost effective does cost money and making sure you get the best product and services from your firm is a major consideration. Make sure the commercial debt collection firm your business chooses offers high quality customer service and delivers information to you that shows they are working hard to recover debt. In most cases, a commercial debt collection firm will assign an account representative for your business, which will be in contact with you on a regular basis. They should update you on progress, problems, and legalities of your recovery. While most correspond via email on a regular basis, make sure you can contact a real person via phone in case you have questions or concerns.

Choosing the right commercial debt collection firm does take lots of thought and research to find the best firm that fits your businesses needs. Our site offers comprehensive tools and resources to not only give you more information to make an educated choice, but also offer tips and insights that will ultimately help you recover your debt quickly, conveniently and as professional as possible.

For more information please visit:

http://www.nationalmanagement.net