How to Deal With a Collection Agency

If you owe money, a Collection Agency can aggressively pursue your debt. While you can fight back, remember that these agencies have limited power. It is vital to know your rights and take proactive measures to reduce the negative impact of third-party collection efforts. Here are some things you should keep in mind before a collection agency contacts you to collect money. Here are some tips for dealing with a collection agency. Don’t give them your contact information or account information.

First-party agencies. These agencies work for the original creditor, so they have a higher incentive to keep a constructive relationship with the consumer. This type of agency may also sell your debt to another agency. However, this type of collection agency may not be compliant with the Fair Debt Collection Practices Act, and you should consider this before hiring a collection agency. The Federal Trade Commission oversees the collection industry, so be aware of any third-party collecting agencies in your area.

Second-party collections. These agencies are independent of the creditor, but they are still part of the creditor and have no obligation to work with them. While third-party agencies may have their own ethical standards, they must also adhere to the Fair Debt Collection Practices Act. This law ensures that third-party agencies will treat consumers with dignity and respect. In addition, a debt collection account can remain on your credit report for up to seven years.

How long a debt collector can work with you. The length of time the agency can continue to contact you depends on the amount of time the original creditor allowed for the collection. Some debt collection agencies will only collect delinquent accounts that are several years old. The period of time when a collection agency can pursue a debt is limited by state laws. The longer the account is past the statute of limitations, the less money the agency can collect.

Debt collection agencies are regulated. They must follow a code of ethics and provide information on their fees and other policies. The federal trade commission oversees the Fair Debt Collection Practices Act. ACA International also regulates collection agencies. Using an ACA member to collect your debt is recommended. As a result, you can be confident that the agency will handle your case in a professional manner. The ACA also has guidelines for collection agencies.

You must know that a collection agency can only collect money after proving that they are legitimate. This means that they will not make a debtor pay for the service. In addition to obtaining the payment, the agency will have to disclose their identity and the purpose of its debt collection. A good reputation is a must for a good debt collector. A company should be willing to explain its identity and how it collects the money. If it does not, the collection agency will lose the case and may even end up ruin your financial situation. These auctions, via sites such as debt collection agency are also available online.