It’s unbelievable how many questions on a daily basis I receive about collection agencies. In this article, I will share with you some of the common questions I receive about collection agencies.
What is a collection agency?
Answer:
Collection agencies are third party companies that use aggressive tactics to collect outstanding debts from consumers. Old debts are either assigned or sold to the collector by a creditor. If the debt is assigned, once the collector obtains the money, a percentage of it is kept by the agency, and the remaining goes to the creditor. If the collector buys debts for 10 cents on the dollar, they own it, and they will want 100% from you.
Why was my account turned over to a collection agency?
Answer:
- The bank could not locate you or contact you
- Your debt is over 120 days late
- You moved out of state and they still can't reach you
Those are the primary reasons why a lender or a credit card company would assign or sell your debt to a collection agency.
What if they did not respond to my validation letter?
Answer:
Pull your credit report to see whether the collection agency has reported the outstanding debt. If the bill is there, send the collector a certified letter with a return receipt stating that they have violated the FDCPA by collecting and reporting negative information on to your credit report without validating it.
In your letter, demand that they delete the information immediately, and include copies of the first certified return receipt mailing and your letter you sent. Give them 16 days to respond to your demand. In the meantime, write a letter to the credit bureau asking them to delete the damaging item because the collection agency was not able to verify the debt.
During this time, if the collection agency has not responded or has not deleted the incorrect item, file a complaint with the FTC and your local attorney general's office. Wait for the credit bureau to respond to you. If they respond saying that the negative item was verified by the collection agency, then it may be time to take legal action. With enough grounds, you can sue them for Defamation and violation of the FDCPA.
They responded to my validation letter with a summons. What should I do?
Answer:
Write back to them stating that they cannot sue you if they have not validated the debt. If the debt goes to court, argue that the collection agency did not validate the debt according to the law.
I don't have the money to pay, what can I do?
Answer:
Send the debt validation letter. If comes back validated, set up a payment plan right away to avoid the debt from damaging your credit report using the negotiation strategies in chapter four.
How did the collector find me?
Answer:
They use an investigative technique called skip tracing. The agency uses computer databases that give them access to your credit report, current and past addresses, voter registration card, DMV records, and other sources with your information on it.
As you can see that there were many questions and answers listed above. I hoped this information will give you a better understanding of dealing with a collection agency. Now that you are empowered with new information, go out there, and take action.
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