A collection agency (in Dutch: incassobureau), also known as a debt collector, is a company that collects payments on behalf of another company. The most common reason people or companies call in a debt collection agency (in Dutch: incassobureau inschakelen), are credit card debts, although they may also collect other types of debts such as medical bills, utility bills, and student loans.
When a company decides to hire a collection agency, they will typically give the agency a list of customers who owe them money. The collection agency will then attempt to contact these customers and collect the debt. If the customer does not pay the debt within a certain period of time, the collection agency may report the debt to the credit reporting agencies, which could negatively impact the customer’s credit score.
Method 1: contacting by phone
There are several methods that collection agencies use to collect debts. The most common method is called “contacting by phone”. With this method, the collection agency will call the customer and try to collect the debt over the phone. If the customer does not answer their phone or if they refuse to pay the debt, the collection agency may send them a letter asking them to pay the debt. If the customer still does not pay the debt, the collection agency may take legal action against them.
Method 2: Doorstep collections
Another method that collection agencies use is called “doorstep collections”. With this method, a representative from the collection agency will visit the customer’s home or business in an attempt to collect the debt. If the customer does not answer their door or if they refuse to pay the debt, the representative may leave a notice on their door asking them to contact the collection agency. If the customer still does not pay the debt, the collection agency may take legal action against them.
Regulations for collection agencies
Collection agencies are regulated by state and federal laws. These laws protect consumers from unfair practices by collection agencies. For example, under federal law, a collection agency cannot contact a consumer more than once every seven days unless they have received permission from the consumer to do so. In addition, under federal law, a collection agency cannot threaten or use violence when attempting to collect a debt.
These are your rights
If you are being contacted by a collection agency, you have rights under both state and federal law. You should never give any personal information to a collection agent over the phone or in person unless you are sure that you want to do so. In addition, you should never agree to make payments directly to a collection agent unless you are sure that you can afford to do so and that you want to do so. Finally, if you believe that a collection agency has violated your rights under state or federal law, you can file a complaint with your state attorney general’s office or with the Federal Trade Commission (FTC).