Friday, June 12, 2015

Myths and Truths about the Debt Collection Industry

Debt collection is an industry that gets an unfairly bad reputation. A lot of what people tend to believe about debt collection is just plain not true. For example, there’s a pretty good chance you’ve heard the following myths about debt collection agencies:

l  Debt collections agencies scam customers; they buy debt for mere pennies and then try to recoup large amounts of money from debtors
l  Debt collectors harass and threaten clients in the hopes of getting paid   
l  Debt collection agencies face very few, if any, regulations, and many operate illegally

None of the above statements are true, especially that last one. Debt collectors, who can be employed by any business, company, or professional that’s having a hard time collecting on owed funds, are actually quite heavily and strictly regulated.

They are governed and watched over carefully by regulations of the Fair Debt Collection Practices Act, which ensures that debts are collected fairly and without undue force or coercion. They are also under the regulations of the Telephone Consumer Protection Act, which governs how customers must be dealt with over the phone, and the Fair Credit Reporting Act, which ensures that all customer information is treated securely and responsibly.

It’s important to understand that while some debt collection agencies buy debt, others do not work that way. They simply try to collect debts for other companies or organizations without actually purchasing the debt themselves. So, many debt collection agencies are actually just in the business of collecting money that’s owed for the person to whom it is owed. They’re not, as so many people wrongly believe, just trying to make a nice profit on the debt they’ve purchased.

Remember, businesses help the world and the economy to operate. When people don’t pay their debts, these businesses, and thus, the economy suffers. Collection agencies are doing their part in the “economic cycle” by helping to collect on owed debts, and it’s not fair for them to be treated like “the bad guys” of the business world.

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