What to do if you get contacted by a debt collection agency?

As soon as a collection agency begins contacting you about a debt, verify the debt before you take any other actions. If you believe the debt is for a different amount, or if you believe you do not owe the debt at all, the process of debt collection arbitration can help you clear the air.

Who is responsible for enforcing the Fair Debt Collection Practices Act?

The nation’s consumer protection agency, the Federal Trade Commission, enforces the Fair Debt Collection Practices Act, which bars debt collectors from using abusive, unfair or deceptive practices.

How many companies are in the debt collection business?

The surge is even greater in the student loan industry, where the delinquency rate is 27.3 percent on all loans in repayment, according to the St. Louis Federal Reserve and total debt is $1.3 trillion. That’s a lot of uncollected money and a good reason over 6,000 companies are in the debt collection business.

How long does it take to get a notice from a collection agency?

Within five days of your first contact from a collection agency, the collector must send you a written notice that lists the amount owed and the name of the creditor to whom money is owed. If the information is incorrect, notify the agency immediately and do not pay any amount.

Who are the authorized collection and recovery agents?

List of Authorized Collection & Recovery Agents S.No Location Vendor Name Date of Agreement Date of Expiry Agency Signatory Agency Address Pin Code

How many people are employed by debt collection agencies?

U.S. debt collection agencies employ just under 130,000 people through about 4,900 agencies. The accounting firm of Ernst and Young published a survey in November of 2017 that said that collection agencies earned $10.9 billion on the approximately $78.5 billion in overdue debts they collected.

What are the rules of engagement for debt collectors?

Rules of Engagement: What Collectors Can and Can’t Do. Borrowers are obligated to pay their debts or work with a nonprofit debt counselor or debt management firm to arrive at a repayment plan. But if you are a delinquent borrower, the law entitles you to privacy and respectful treatment.

What does it mean when a collection agency buys your credit card?

“They are a third-party business [that] buys the delinquent accounts. The collection agency will now take over the responsibility of convincing you to pay your credit card debt. Whatever they collect from you becomes their profit.”

How to get a hold of a collection agency?

When contacting the collection agency, make sure that you refer to the debt by listing the account number and not as “my debt”. What to check: Before you think about how to get a hold of a collections agency, first, check twice that you actually owe the debt. Check your credit reports to get the required details of your debt account (s).

Can a debt collector contact a third party?

The Fair Debt Collection Practices Act allows debt collectors to contact certain third parties, including employers, only to get contact and location information about you. This means that debt collectors can contact your employer to confirm your employment.

How are debt collectors allowed to contact you?

Debt collectors are permitted to contact you by every communication system available – phone, letters, email or text message – but there are rules they must follow or they are in violation of the Fair Debt Collection Practices Act (FDCPA). Those rules include:

What to do if you get a call from a collection agency?

A legitimate collection agency would have received that information from the creditor. Don’t discuss the debt with someone who calls out of the blue. Demand that the caller provide the legally required written notice first. Don’t make a payment you’re not sure you owe to get a collector off your back. Insist on verifying the debt claim.

What do debt collectors report to credit reporting companies?

Credit Reporting: What debt collectors may report to credit reporting companies. Old (Time-Barred) Debts: Debt collectors may not be able to sue you to collect on old (time-barred) debts, but they may still try to collect on those debts.

What happens when you pay a debt to a collection agency?

If you pay, the collector will earn a profit on its debt purchase. If a collection agency calls you rather than sending you a letter, simply tell the agent to send you everything in writing and then hang up the phone.