Debt Collection Agencies : Understanding a Growth Industry

Author: Martin Mcallister

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.

Article Source: http://www.articlesbase.com/credit-articles/debt-collection-agencies-understanding-a-growth-industry-108392.html

About the Author

Capquest is a member of, and are regulated by the Credit Services Association.

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Fair Debt Collection Practices

Author: Bob Guy

If you have debt and you’re living paycheck to paycheck, then you need to be aware of what could happen if you lose your job. When you miss a payment on a credit card or loan, then the companies you owe will start the debt collection process. Let’s say that you can’t pay. You’ve lost your job and there is simply no way that you can make your payment anytime soon. Even if you still have your job, the collection calls can start to pour in at home and at work.. If you’ve had it with harassing phone calls, then read on to learn about your rights and the correct way to handle debt collection calls.

First of all, you should make every effort to pay as much as possible, as often as possible. If you make even a minimal payment, it can help stop the collection efforts from disrupting your life or embarrassing you at your place of employment. Keep in mind that debt collectors do have a right to call you and try to collect their payments. If the process seems excessive, then you may be interested in the laws set to protect you from harassment from debt collectors. The Fair Debt Collection Practices Act outlines your rights.

The Fair Debt Collection Practices Act states that you have the right to request that you only be contacted by mail for debt collection efforts. You may only need to verbally request not to be called at home or work anymore, but your best bet is to send a certified letter outlining your request. The Fair Debt Collection Practices Act does not apply to your regular credit card companies. It only applies to actual debt collection agencies or attorneys attempting to recover funds from you.

Usually the credit card company itself will only attempt to collect from you a few times before turning your account over to their attorney or to a debt collection agency. If your credit card company is harassing, then the Fair Debt Collection Practices Act won’t help you. But, you can quote your state law when asking them to stop calling and only write instead. Most states require that credit card companies stop collection calls once they are notified in writing, usually by certified letter, and utilizing this law can help you stop collection calls.

Even after you send a certified letter asking to only be contacted by mail, credit card companies, attorneys and debt collectors are still allowed to call you under certain circumstances. If the status of your account changes, then they are allowed to call and inform you. Debt collection agencies can phone to tell you that they are turning over your account to an attorney. Attorneys and/or debt collection agencies can call to let you know if they are suing you for the debt that you owe.

Try to work with the companies that are attempting to collect from you. If you take all of the appropriate steps and the harassing calls do not stop, then you may have the legal right to sue them for damages.

Article Source: http://www.articlesbase.com/credit-articles/fair-debt-collection-practices-242059.html

About the Author

About the Author: Bob is an Online Marketing Strategist of paydayone.com, a company that can provide a payday loan or a cash advance to individuals. For more information, please visit www.paydayone.com.

Popularity: unranked [?]

Prohibited Debt Collection Practices

Author: Greg Artim

As we all know, the country is in the midst of an economic crisis. Delinquencies on credit card accounts are at an all time high. Many of these delinquent accounts are being sold to unsavory debt collection agencies who have purchased the debt for pennies on the dollar, who then attempt to collect the monies from you. There is a federal law that governs debt collection in this country, and it is called the Fair Debt Collection Practices Act (FDCPA). The Act sets forth some criteria, guidelines and policies that must be followed by debt collectors. The following are some examples of prohibited debt collection practices as set forth in the FDCPA:

Harassment. Debt collectors may not harass or abuse any person in the attempted collection of a debt. For example, debt collectors may not:

- call you at unreasonable times. This means that all calls should take place between 8 a.m. and 9 p.m., unless you give them authority to call at other times.

- call you an unreasonable number of times. I have had clients tell me that they received upwards of 40 phone calls in one week from a debt collector. Clearly, that is meant as harassment.

- falsely imply that they are attorneys or government representatives. In some states, like in Pennsylvania where I practice law, it is actually a crime to misrepresent oneself as an attorney.

- falsely imply that you have committed a crime. In most instances, the non-payment of a credit card account is not a crime.

In addition, Debt Collectors also may not state that:

- you will be arrested if you do not pay your debt; I am not aware of any law in the land that allows for an arrest where the individual has failed to pay a credit card invoice.

- they will seize, garnish, attach, or sell your property or wages, unless the collection agency or credit intends to do so, and it is legal to do so (garnishment of wages is currently prohibited in four states, my home state of Pennsylvania included, for the collection of most debts):

Debt Collectors may not:

- give false credit information about you to anyone;
- send you anything that looks like an official document from a court or government agency when it is not;
- use a false name.

Debt Collectors also are prohibited from engaging in Unfair practices. Debt Collectors may not engage in unfair practices in attempting to collect a debt. For example, collectors may not:

- collect any amount greater than your debt, unless allowed by law;- deposit a post-dated check prematurely;
- make you accept collect calls or pay for telegrams;
- take or threaten to take your property unless this can be done legally;
- contact you by postcard.

Article Source: http://www.articlesbase.com/law-articles/prohibited-debt-collection-practices-677042.html

About the Author

Greg Artim is a Consumer Attorney based in Pittsburgh, PA. He handles Credit Card and Collection Agency Defense matters in all of Pennsylvania. For more answers to your Fair Debt Collections Practices Act questions, please visit his website at Fair Debt Collection Practices Act .

Popularity: unranked [?]

What To Do About Debt Collection Harassment

Author: Antonio Filippone

If you have ever fallen behind on a debt for more than a month you have probably experienced the dreaded call from the debt collector. And while some debt collectors are just people like you and me trying to do their job, others can be down right abrasive in their attempt to collect your back payments. Some people have been treated like a criminal, talked down too, embarrassed at their place of employment or even in there home while entertaining friends. This does not have to happen to you.

You should know that the Fair Credit Collection Practices Act (FDCPA) protects you as the debtor. The law does not negate the debt you own but it insures that you are treated fairly by debt collectors and it even prohibits certain types of collection practices.

If you are currently in this situation and you are concerned with maintaining a decent credit score in the future it is a good idea to try and make realistic payment arrangements that you can afford. If the collector attempts to have you agree to a payment arrangement that you know you can not follow through on simply say so and never agree to any terms that don't seem reasonable to you.

If however collectors are unwilling to cooperate and continue to harass you, ask them to stop calling. This usually will stop the calls but in case it doesn't you can then send them a Cease and Desist letter. This is much easier than it sounds. Here is what you can do.

Ask the caller for his companies name and address. (This is information they must disclose so do not be afraid to ask for it) Then write a standard business letter with your name and address at the top, the date, and your account # in question. Under that you will put their company name and address then after a brief greeting you can state, According to the Fair Debt Collection Practices Act,15 U.S.C. section 805., you are hereby notified to cease and desist all further communication with me in regard to the referenced account. Failure to comply will result in a complaint being filed against you with the Federal Trade Commission, the Attorney General of your state. I also reserve the right to file suit against you for any future violations of this law. I will record any phone calls if you fail to comply with this notice. Then ad your salutation and sign it. You want to be sure to mail the letter using certified mail using the return receipt requested feature.

This process almost always works but remember they do still have a right to continue to collect the debt. They can file a law suit to try and collect the debt. Although sending a cease and desist letter is a valuable tool, it should only be used when absolutely necessary and after reasonable negotiations have failed. Keeping open communication is a better choice as long as you are not being harassed.

Article Source: http://www.articlesbase.com/finance-articles/what-to-do-about-debt-collection-harassment-1862988.html

About the Author
Antonio Filippone is a respected Speaker, Author, and Consultant on the topic of financial planning for middle American people.Readers who are interested in learning how to quickly fix their money problems can read his unique story at http://www.NotYetWealthy.com

Popularity: 6% [?]

Your Credit Rights… The Fair Debt Collection Practices Act

Author: Ty Crandall

Many consumers have their legal rights violated by collectors without even knowing it.  The Fair Debt Collection Practices Act is designed to stop harassing, unfair, and abusive debt collection practices.

Knowing the important details of this act will help you stand up against abusive collection practices and stop collection companies from violating your rights.

There are many requirements debt collectors must abide by per the FDCPA. 

Debt collectors are not allowed to tell others details about the consumer including that they owe a debt, they cannot communicate with anyone other than the consumer more than once, not communicate through post card or have ANY markings on the outside of their envelope indicating they might be a debt collector.

Basically, collection companies cannot use the fact that they are a debt collector to bully you into paying. 

They cannot identify themselves as a debt collector to your employer, and they cannot send things in the mail to identity they are a debt collector with the intent of embarrassing or causing other hardship to you. 

Debt collectors are also not allowed to call a consumer at an unusual time or place. This includes before 8 a.m. and after 9 p.m.  A debt collector cannot contact a consumer at their place of employment if they have reason to believe this is prohibited by the employer.

They are also required to immediately cease and desist contact with you if you are represented by and attorney, or if you notify them to do so in writing or notify them that you refuse to pay the debt.

There are many restrictions of abusive and harassing practices in the FDCPA also.  Debt collectors are prohibited from using the threat of violence or other criminal means to cause harm to the consumer.

The use of obscene language is prohibited along with the publication of information that the consumer allegedly owes the debt.

Debt collectors cannot cause a consumer’s phone to ring repetitively with the intent to annoy or harass any person.  And they have to clearly identify themselves on every phone call.

False and misleading representations are also prohibited per the FDCPA.  These include the debt collector identifying themselves as an affiliate of the United States government, miss-representing the legal status of a debt, or that they are an attorney if they are not.

Your debt collectors cannot falsely represent that the nonpayment could result in the arrest or imprisonment of the consumer or the seizure of their property or garnishment of their wages unless such action is lawful and the debt collector intends on taking that action. 

Debt collectors are not allowed to communicate to any person credit information which is known to be untrue or in dispute.  They also cannot falsely issue you documentation representing itself as coming from the courts.

They also are prohibited from using any false representation or deceptive means to collect a debt.  They must identify themselves to the consumer as a debt collector and that the nature of the call is for that purpose.

Debt collectors are NOT directly affiliated with the credit reporting agencies, and they cannot claim that they are per the FDCPA.

They cannot accept post dated checks of more than 5 days, or attempt to collect more than what is owed due to the original contract. 

They must also send a statement to each consumer within 5 days of contacting the consumer.  This letter must contain many things including the amount of the debt, creditor’s name, and many disclosures specific to FTC language.

 Any violations within this act can be costly to the debt collector, especially in the civil and class action aspects. 

To learn more about consumer credit laws and how they can help you challenge your creditors and win visit www.PerfectCreditFast.com. 

Resources-         Federal Trade Commission, http://www.ftc.gov

Article Source: http://www.articlesbase.com/credit-articles/your-credit-rights-the-fair-debt-collection-practices-act-1116152.html

About the Author

Ty Crandall is an international authoritative expert on credit scoring and credit law. He has spent over 12 years in the financial and credit arenas helping clients rebuild their credit profiles and qualify for financing.

Ty is currently the CEO of Elite Credit Incorporated. At Elite he has designed dispute techniques that have revolutionized the credit repair industry.

Ty’s extensive knowledge of finance and credit law gives him and his team an unique ability to design and implement custom tailored dispute strategies resulting in fast loan approval.

This is why Elite Credit Inc. is known as the industry leader in credit restoration resulting in loan approval. Many of the largest banks, auto dealers, and mortgage companies nationwide are exclusive Elite Credit partners.

For more information on credit scoring and the protection of consumer credit rights please visit www.PerfectCreditFast.com.

Popularity: 1% [?]