How a Collection Agency Works
You have a legal right to ask the name of the original creditor if you think the debt collector has wronged you. The debtor has 30 days to dispute the bill and contact the creditor. After that period, the collection agency may contact the debtor several times. The debtor may not be able to pay the entire debt at once but can make payments in small amounts, if he or she chooses. A Collection Agency will only contact the debtor once per day, unless the collection process is expedited.
The reason a Collection Agency may not collect money from you is because it is unlikely to find your debtor. This is a huge disadvantage because you won’t know if the agency will be able to track down your debtor. If the agency has to work with someone who has a bad credit history, the chances of success will be much lower. The agency may not be able to recover the debt, and you will be stuck paying higher interest rates.
If you decide to use a Collection Agency, you should be aware of the company’s mission and methods. These agencies must follow a strict set of ethics and must treat consumers with dignity. They must also appoint an officer who is empowered to handle complaints. Moreover, it is best to avoid dealing with collection agencies that do not belong to trade associations or federations. In most cases, these firms do not have a good reputation and are better able to resolve complaints with consumers. These auctions, via sites such as debt collection agency are also available online.
Most Collection Agencies charge between 20% and 50% of the amount they collect. However, they are not required to disclose this fee on their websites. Most small businesses seek help from a Collection Agency once their debt has been 90 to 120 days late. If you go after your debt collector too aggressively, you may lose your customers and risk losing your customer. Generally, the more delinquent a debt is, the harder it is to collect.
A Collection Agency’s notice letter must contain a specific amount of money owed to the debtor. Typically, this amount is around 25% of the total amount owed. It is important to understand that a collection agency may not be in your best interest. A debtor’s representative should be able to contact a Collection Agency to resolve the issue. Whether a debt collector is legitimate or not, they should always state their purpose.
Many Collection Agencies are members of the ACA. In exchange for their services, these companies must abide by the ACA’s standards of conduct. Most of these agencies will charge a fee for each communication they send to a debtor. They may even email or text the debtor in an attempt to collect the money. If this is not possible, the agency will not pursue the account. If the collection agency does, it will not contact the debtor.