Likelihood is one in one million that most people do not know who or what a ‘debt collector’ is; well, at the least one in a couple of thousands! When most economies confronted recession and money owed mounted, there have been millions of people left with undervalued assets who confronted hardships facing rising prices and tackling debts that had mounted.
The introduction of ‘plastic cash’ or Credit Cards created an enormous marketplace even for folks without the actual money to exit and shop for things without a care in the world. Suddenly the consumer became “king” and every bank or commercial company was issuing credit cards to anyone who might substantiate some kind of earnings proof. Soon many found themselves in debt beyond their limited incomes.
That’s where the debt collector makes an entrance! A ‘debt collector’ is the term used to denote a person or agency that often collects money owed owed to creditors. Debt collection is the observe carried out by cash lenders and creditors to secure payments from people and businesses that are sure legally to repay the money they owe. Each debt recovery company or debt collection agency needs to be aware of the regulations concerned and the authorized obligations involved in gathering debts.
Debt collection covers any unpaid payments or unpaid quantity amassed towards personal payments like credit card account, vehicle loan or mortgages, medical payments, household money owed etc. This usually entails a single particular person known as collector or an company known as a collection agency. The enterprise of such an agency that features as an ‘agent of the creditor’ is to pursue debtors who owe sums of cash to creditors. They collect money owed for a fixed price or for an agreed share of the total sum owed by the debtor.
There are various types of debt assortment agencies.
• First party companies – typically they are direct agents like paid staff or subsidiaries of the creditor (a person or firm)
• Third party companies – these are outside companies contracted by a creditor company or particular person to pursue the debtor and acquire the amounts owed; the service is done for a fee.
In some cases, ‘debt consumers’ purchase delinquent debts at a pre-agreed share of the value after which contact the debtor to gather it, usually with a mark-up both ways to cover costs.
Globally, every country has its own set of guidelines and regulations covering debt collection. Every country has put in place consumer protection laws to protect consumers against malpractices by debt assortment agencies. A number of consumer protection agencies worldwide advise consumers and customers to be educated and informed in regards to the laws concerning money owed; ‘knowledge is energy’ to safeguard oneself.
In spite of laws being in place to manage debts and debt collections, cases of debt evasion by debtors and harassment by debt assortment agencies are mounting. Debt collectors can’t engage in illegal or misleading practices such as deception and falsified details about the amount of money owed in debt, pose as a lawyer or legal professional, etc.
Frequent examples of harassment by debt assortment businesses are:
• Annoying and repetitious phone calls to the debtor or debtor’s family members
• Use of obscene or rude language
• Threats of physical harm, violence or causing fright and nervousness by threatening authorized action
• Publishing info of debtors in publications
• Hiding their identity and infringing upon the privateness of a debtor
There are regulations to make sure consumer safety and protection. If the debtor is in dire financial situation, a third-party intermediary like an advocate or legal professional can liaise between the collector and debtor and arrive at a settlement scheme that’s acceptable. If nevertheless, the consumer or the debtor sues the collector for any violation under established laws and wins a case, the debt collector is bound to pay all authorized fees and any damages caused to the debtor.
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