Part 11:
As part of series of articles (blogs)
regarding Credit and Credit Score, here we
go:
A collection agency is a business that
pursues payments of debts owed by individuals or
businesses. Most collection agencies operate as
agents of
creditors
and collect debts for a fee or percentage of the
total amount owed.
There are many types of collection agencies.
First-party agencies
are oftentimes subsidiaries of the original
company the debt is owed to. Because they are a
part of the original creditor, first-party
agencies may not be subject to legislation that
governs third-party collection agencies.
Typically, first-party 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.
Third-party agencies
are separate companies contracted by a company
to collect debts on their behalf for a fee.
Debt buyers
purchase the debt at a percentage of its value,
then attempt to collect it. Each country has its
own rules and regulations regarding them. In the
United States, consumer third-party agencies are
subject to the federal
Fair Debt Collection Practices Act
of 1977 (FDCPA), which is administered by the
Federal Trade Commission
or FTC.
Debt collectors who work on
commission
may be highly motivated to convince debtors to
pay the debt. These practices are highly
regulated by The Fair Debt Collection Practices
act, State laws to protect consumers, the
Consumer Financial Protection Bureau (CFPB), the
Federal Trade Commission, and State regulatory
agencies.
The
FDCPA
also establishes what time of day calls can be
made at, to whom and where. Valid times are
between the times of 8am and 9pm local standard
time.
Please note that this is the consumer’s local
standard time and not the collection agency’s
local time. There are some collection agencies
that are not in the same time zone as the
consumer’s time zone and make calls, by mistake
or by purpose to annoy consumers, on their own
local time and they think is ok, but it is not.
For example; if they are in East Coast, making a
call at 8:00 AM EST, to a debtor that lives in
Central Standard Time Zone, it is 7:00 AM.
For complete rules and restrictions that affects
Collection agencies, please see Appendix A5 of
Credit Score Tips and Tricks: Fair Debt
Collection Practices Act and Appendix A6: Texas
Fair Debt Collection Practices Act for consumers
in state of Texas.
HOW to overcome the problems with your credit
history and credit score?
Knowledge, education, awareness, practice and
discipline are the essential keys to being
successful on any subject. The book,
"Credit Score Tips and Tricks",
provides you information, tools, techniques to
educate yourself and manage your credit report &
credit score, and therefore manage your finances
effectively at no additional cost.
I have decided to bring and share with you,
chapters or sections of the book,
Credit Score Tips and Tricks,
as series of
articles here. This is the number
11 of such a
series.
I also created and manage a GROUP in ActiveRain,
Credit Reports and Credit Scores, Please
feel free to join and share your thoughts and
experiences.
