What makes a collection agency a collections agency?

A collection agency is usually contracted because it focuses on recovering debts that are past due. Debt collection can be outsourced to a third-party agency, or transferred to a debt collection department within the creditor’s firm. Companies find it cheaper to have a collections agency recover unpaid debts than to chase the clients directly.

Who is americollect and what do they do?

Americollect isn’t a household name, but it is a legitimate debt collection agency that specializes in medical debt. They have been collecting past-due balances for hospitals, doctor’s offices, and labs since 1964. Headquartered in Manitowoc, Wisconsin, Americollect has named itself “the ridiculously nice collection agency.”

Can a debt buyer hire a collection agency?

While a collection agency would attempt to recover the debt for the lender or creditor for a commission, the debt buyer wants to buy the debt to make a profit. Debt buyers may also hire collection agencies on a contingency basis, however, the FDCPA rules do not apply to debt buyers.

What should I do if debt is canceled by a collection agency?

The collection agency should send a 1099-C form that lists the cancellation amount. Be sure to give this form to your accountant or tax preparer to be included on your tax return. Failing to report canceled debt could result in a tax bill from the IRS later down the road.

How to get a collection agency to remove information?

The collection agency may tell you that this is not its decision—that only the original creditor can remove the information. Ask for the name and phone number of the person with the original creditor who has authority to make this decision. Call that person and plead.

What happens when a debt is sold to a collection agency?

When your original creditor can’t collect your past-due balance, it’ll sell your debt to a debt collection agency which means you now owe the money to the agency. But when the agency buys your debt, it doesn’t pay the full amount. It may pay only a fraction of what you owed on your original debt.

Can a collection agency Sue you for an outstanding balance?

After all, it’s not the original company you created the debt with. Once you default on the original credit agreement and the business sells the debt to a collection agency, that agency has the right to collect on that debt — assuming the collector operates legally. A collection agency may even be able to sue you for an outstanding balance.

Can a provider report a debt to a collection agency?

In our experience at Clearpoint, it’s rare for an original provider to report directly to the credit reporting agencies. What’s easier, and often less expensive, is to sell the debt to a third-party collection agency instead who handles all of this on their behalf.