This is the first article in a three part series on the essentials of debt collection. When you take out an account, and do not pay your account bills on time, the account goes delinquent and your bills change into debt. A debt collector is a person whose job it is to attempt to get in contact with you and retrieve that money, or in other words, collect the debt.
Debt collectors can also be called bill collectors, account collectors, or collection agents. A lot of debt collectors work for third party collection companies. A creditor is the financial institute that you originally set up your account with. For example, you set up an account with a contractor to do work on your house. When you don’t pay your bills, this creditor will often hire outside of their company to get their debt collected, especially if their accounts receivable department is small.
Other collectors work straight for the original creditors. These people are called in house collectors. Generally companies with in house collectors are finance based institutions like health care providers, utility companies, or credit card and mortgage companies. In house collectors are working straight for the creditors, while third party collectors are working for their own collection agency, so both sets of collectors must follow different guidelines and regulations when it comes to collecting debt and directing payment.
If you are being contacted by a debt collector, try to determine if they are calling on behalf of the original creditor or a third party debt collection agency so you have a better idea how to proceed. If you are being contacted by a third party debt collection company for example, you are usually going to be told to pay the agency, not the creditor.
Collectors working directly for the creditors and not third party agencies do not always have to adhere to all of the rules of the Fair Debt Collection Practices Act either. Mail from an in house collector letting you know that you owe a payment can be marked accordingly, while mail coming from a third party debt collection agency can not show any indication that it is an attempt to collect money. To Be Continued In Parts Two And Three
Mallory Megan works for Rapid Recovery Solution and writes articles about medical collection agencies.