What Does a Debt Collection Agency Do?

A debt collector, by definition, is a company or agency in the business of recovering money owed on delinquent accounts.

Debt collection agencies are hired by companies to collect their past-due accounts. The agency then filters through all the documents that support each account to ensure they are legally collectable. If they are, what means will be necessary to collect? 

Validating the debtors’ contact information ensures the collector is contacting the correct individual. If they find the contact information given to them by their client is invalid, they perform a skip trace to retrieve details that match the debtor.  

Once an account is validated, it is sent to a collector to begin the collection process.  This begins with a demand letter sent to the debtor informing them that their account has been turned over to collections. In that letter are the details of the debt, and contact information to resolve it. The debtor is then given a time period to resolve the account on their own. If they fail to contact the agency before a specified date, the agency begins phone calls and emails to continue their contact attempts. 

What if A Collection Agency Calls You?

If you receive a call from a debt collector, it is likely that you’re behind on a bill. The agent will first read a statement called a mini-Miranda, letting you know that the call is an attempt to collect a debt. Once they confirm they are speaking to the right individual, they will explain the debt. They will include information such as the origin of the debt, the amount owed and the delinquency of the account.

The agent will confirm the debt with you and give you the opportunity to explain why the account is behind in payment.

Agents like the ones at Cedars Business Services listen intently to what you have to say to determine the best resolution to your debt issue. Upon hearing your situation, they will give you options which may include:

  • Paying in full
  • Setting up a payment schedule
  • Discounts offered by the creditor if payment is made

How Do You Handle a Debt Collection Call?

  • Answer the phone

This is possibly the most important step. As tempting as it can be to ignore those calls, ignoring them only makes matters worse. Your debt will become more delinquent, and the agency will continue to call. Answering the phone puts you on the road to resolution.

  • Validate the debt

Ask questions if the debt doesn’t sound familiar. From time to time we run into a situation where the debt has already been paid, or the contact for a purchase is incorrect. These things happen, so be sure the debt you’re discussing belongs to you. 

  • Be honest

Debt collectors need to know your situation in order to best assist you. Cedars Business Services can explain in more detail but if you are not completely honest, a debt collector cannot do their job well. Can you pay? If so, how much? Are you at a point where you can’t pay anything? Explain that to them so they can give you options that fit your finances.

Debt collectors are not difficult to work with. They information and problem solve. If you come across a collector that is in any way aggressive toward you, feel free to ask to speak with a supervisor or report them. There is never a situation where an agent should speak to you with anything other that respect and kindness.