When it comes to debt collection, your options are limited. A debt collection agency can only handle certain types of debts. You may be able to find a company that will pursue your old debt if it is a few months past due, but some companies won’t pursue a debt that is several years old because the statute of limitations has passed. Depending on the amount you owe, a collection agency can come after an old debt indefinitely.
To make sure that you don’t end up getting ripped off by a collection agency, read the fine print. First, it is important to know that collection agencies must disclose their identity and their reason for contacting you. They also cannot use profanity or threats to contact you. Finally, they cannot publicize your situation or try to collect debt that you don’t owe. Generally, this is the only way to avoid being harassed or sued.
When hiring a collection agency, you should always check the FDCPA rules. Most agencies are bound by the FDCPA, which governs how collection agencies conduct business. If a debtor fails to pay, a debtor’s account will be reported to the credit bureaus and the debt can be turned over to a collection agency within three to six months. However, if you do receive a letter from a collection agency, it will likely be for good. You can get more information about collection agency quotes .
Third-party collection agencies often have a higher profit margin, because they are part of the original creditor. They may attempt to collect the entire debt, or at least a portion of it that is profitable. In one study, collection agencies paid the original creditor on average only 4 cents for each dollar they collected. Then, they would sell the debt to another collection agency. This has created a great deal of doubt as to whether the information provided by these companies is accurate.
Many collection agencies are members of a trade association. These organizations agree to uphold the ACA code of ethics and to appoint an officer to handle consumer complaints. It is possible to contact the ACA for help if a debt collector contacts you. If you are not sure if you’re dealing with a third-party agency, you can ask the debt collection agency for the details of the agency’s policies and procedures.
When collecting delinquent debt, a collection agency can attempt to collect the entire debt or just a portion of it. The former option is more lucrative, since the agency will pay the debtor less than 4 cents on the dollar. A third-party collection agency is not subject to the FDCPA and may merely try to collect the total amount. The latter option is more common, but it is best to discuss the terms of a third-party’s policy with a third-party agent.