| What is a collection agency? |
|
A collection agency is usually nothing more than a business that is paid to collect on a debt owed. Increasingly, law firms are "specializing" in collecting on owed debts. In my opinion, these "collection specialists" are nothing more than bottom-of-the-barrel attorneys that can't win a case against big businesses. Therefore, they pick on the average consumer that is not familiar with the law and they can easily use scare tactics on. Normally, collection agencies charge a fee (usually a commission) off of the debt that is owed. They may also purchase the debt owed and the debtor would then owe the collection agency and no longer owe the company from where the debt originated. It is a common myth that collection agencies have special legal powers. Some agencies may create this perception via intimidation on the phone. This is a scare tactic used to try and get debtors to pay as much of the debt as possible. A collection agency, though, has no more legal power than the average person or business. They, just like any other business you may owe, are legally bound by federal laws. The two main federal laws that state your rights are the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. It is highly advised that you learn your rights. It is common for collection agencies to either violate these acts or take actions that are borderline of violating the Acts. |
