DEFINITION of Debt collector
A collection agent is a company or agency whose mission is to recover amounts owed on overdue accounts. Many debt collectors are hired by companies to which money is owed by debtors, operating for a fee or a percentage of the total amount collected. Some debt collectors are debt buyers; these companies buy the debt at a fraction of its face value and then attempt to collect the full amount of the debt.
How To Deal With A Debt Collector
DEBT COLLECTOR BREAKDOWN
A borrower who is unable to settle his debts or who does not make the payments provided on a loan will have his arrears reported to the credit bureau. Not only will his credit history be affected, but his debt will be paid to a collection agency or a collection agent within three to six months of the default. Late payments on credit card balances, telephone bills, car loan payments, utility payments and tax arrears are examples of overdue bills that a debt collector may be responsible for. recover.
Companies find it cheaper to get a debt collector to collect unpaid debts than to sue the customers themselves. The collector has the tools and resources necessary to find a debtor, whether he has changed location or telephone number. These agents also apply several strategies, such as calling the debtor’s home phone and work phone, and even showing up at the person’s door from time to time to get them to pay their balance. Debt collectors can also contact family, friends and neighbors of the borrower to confirm the contact information they have on the individual’s file, but they cannot disclose the reason they are trying to reach the person. An agent can also choose to mail late payment notices to the debtor. In all cases, the collection agents ensure that the debtor has his full attention.
If the individual moves and pays their debt, the creditor pays the collector a percentage of the funds or assets that the agency recovers. Depending on the contractual agreement with the original creditor, the debtor may have to pay the entire debt at once or only part of the debt at a time. However, if the borrower still does not cover his overdue account, the collector can update the borrower’s credit report with a “recovery” status. Having this status on a credit report is sure to decrease the credit rating of the individual. A low credit rating will affect his chances of getting a long-term loan, especially since a debt collection account can remain on a credit report for seven years.
Collection agents are controlled by the Federal Trade Commission (FTC), which enforces the Fair Debt Collection Practices Act (FDCPA). The FDCPA prohibits collection agents from using abusive, unfair or deceptive practices during the debt collection process. For example, debt collectors are not allowed to contact debtors before 8:00 a.m. or after 9:00 p.m. nor can they wrongly pretend that a debtor will be arrested if he does not pay. A debt collector would be found in violation of the FDCPA if he / she continues to collect an old debt that has been charged as uncollectible. A bad account is an account that has no chance of being repaid due to the fact that the borrower has filed for bankruptcy or cannot be found. In addition, unless a debt agent has won legal action against a debtor, he cannot legally seize the assets of a debtor or physically harm or threaten a debtor to make a payment.
Finally, a person has the right to issue a cease and desist letter to a collection agent who contacts them repeatedly in a short period of time, because the FDCPA considers this behavior as a form of harassment. If, after receiving the cease-and-desist, the collection agency continues to harass the person, it can report to the Office of Consumer Financial Protection (CFPB).