What is a Collection Agency?

If you’re behind in paying your bills, or a creditor’s records mistakenly make it appear that you are, a debt collector may be contacting you.

Under the Fair Debt Collection Practices Act (FDCPA), a debt collector is someone who regularly collects debt owed to others. This includes collection agencies, attorneys who collect debt on a regular basis, and companies that buy delinquent debts and then try to collect them.

Some collection agencies are departments or subsidiaries of the company that owns the original debt. Typically these type of collection agencies try to collect debts for several months before passing it to a third-party agency or selling the debt and writing off most of its value “charge off”.

The term collection agency is usually applied to third-party agencies, called such because they were not a party to the original contract. The creditor assigns accounts directly to such an agency on a contingency-fee basis. The collection agency makes money only if money is collected from the debtor. Depending on the type of debt, the age of the account and how many attempts have already been made to collect on it, the fee could range from 10% to 50%

Who Regulates Collection Agencies?

Collection agencies are regulated by The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect debt.

According to the FDCPA a debt collector may not contact you at inconvenient times or places, such as before 8 in the morning or after 9 at night, unless you agree to it. And collectors may not contact you at work if they’re told (orally or in writing) that you’re not allowed to get calls there.

How can I stop a debt collector from contacting me?

If you decide that you don’t want the collector to contact you, tell the collector – in writing – to stop contacting you. Keep in mind the creditor or the debt collector still can sue you to collect debt.

Credit Firm has helped thousands of clients delete Collection accounts from credit reports. If you have a Collection account or accounts reported as “in collection” reporting on your credit report, contact Credit Firm to improve your credit and boost your credit score.