If you receive a call from a debt collector, it means you have an unpaid bill – that has been in arrears for possibly a few months. The company that you owe the money to has probably sent you several bills or reminder notices. If you have not contacted the company, paid the bill in full, or at least part of the bill, the company no longer considers this an open bill. It is now called bad debt.
Debt collection agencies are hired by a company to collect the money owed to them. Debt collectors are more aggressive in their efforts, as they know that you have in all likelihood been avoiding any contact with the company, and are likely to ignore their efforts as well. Yes, at this point you are no longer considered a customer, you are a debtor. This is not a badge of honor and it is a label you should do everything you can to avoid.
Debt collectors are often permitted to report your information to the credit reporting agencies. These are the people responsible for tracking your bill-paying habits. It is the main indicator on how responsible you are with money. Car dealers, mortgage companies, and credit card issuers look at credit reports to determine if you will be a good customer – that is, one who pays their bills.
Generally, there is no escaping debt collectors, who use a number of methods to find you – even if you move house. Because they have been hired to find you and collect the outstanding money, they will resort to embarrassing you by contacting your employer, neighbor or even your child’s school in order to track you down. Many collection agencies only earn their fee when they have collected money from the debtor, so it is in their interest to do everything possible to find you and convince you to pay the debt. One of the reasons they are so determined to find you is that they only get paid for their services once you have paid off the debt.
The debt collection industry is regulated by Federal rules and guidelines to ensure that your rights are not violated too, despite some disreputable companies’ methods. If you believe that you do not owe money to the original company, you should contact them immediately.You can also try working with the debt collector to work out the confusion. In order to protect your rights, make copies of all communication between the three parties, and keep notes on telephone calls and meetings wherever possible.
One method of debt collection that contravenes the Fair Debt Collection Practices Act is the use of threats to recover the debt. Report any violations to the Better Business Bureau.
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Tags: Debt, Debt Collectors