What is a Debt Collection Agency?
A debt collection agency provides collection services to creditors. After being hired, the agency acts as a middleman to collect debts on the creditor's behalf and earn a certain percentage of the debt. They retain the right to contact clients through letters and calls, file lawsuits, or do debt settlements. Debt collection agencies represent original creditors and act as the third party to recover debts on the creditor's behalf. They do not retain ownership, nor do they have control over the debt.
What is a Debt Buyer?
Many companies sell their bad debt or aged debt to debt buyers. These debt buyers are companies that buy debts from creditors for as low as pennies on the dollar. After purchasing the debt, they go to the debtors to collect 100% of the original debt. The debt buyer retains the debt ownership and can pursue collecting the debt as they please. The original creditor does not hold any control over the debt.
The debt collection agency and the debt buyer try to retrieve the debt from debtors as soon as possible. For that, they tend to adopt aggressive tactics such as: constantly calling and sending letters, filing lawsuits, or obtaining default judgments against the debtor. Often, their outcomes are successful by utilizing such fearful tactics. However, debt collectors are obligated to abide by the rules in the Fair Debt Collection Practices Act. Otherwise, they will violate the Act and will face severe repercussions as a result. To learn which acts violate the FDCPA, read our blog on Debt Collection Harassment.
Excessive calls and lawsuits filed by debt collectors can be intimidating and financially devastating, but you have protection under the law through your consumer rights. To best protect your rights, you need a debt collection defense and consumer protection attorney to represent you and help you during the process.
If you ever find yourself in a situation where you receive letters or calls from these companies or are sued by them, contact us at info@tariqlaw.com so that we can defend you against their illegal and threatening tactics. We focus on debt harassment and debt collection lawsuits and specialize in defending clients from unethical debt collectors and the illicit collection practices they tend to use.
