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Understanding The Deal With Your Collection Agency

By Ken Godberson Iii

When money is tight and you miss a mortgage payment or you have maxed out a credit card, do you get a chill up your spine? The very notion that you may have to deal with the financial bogeymen we know as collection agencies can do that. However, it is quite odd at how few people know the mechanics and limitations of collection agencies. It will be the purpose of this article to help shed some light on these “bogeymen” and provide knowledge of their objectives, formations and the limitations placed upon them by the law.

A collection agency is a business that specializes in contacting and obtaining debts owed from either individuals or businesses. They are used for varieties of debts owed: whether it be mortgage payments or even extremely late library books. Just as there is a variety of debts, so too is there a variety of collection agency types. The most simple of the types are first and third-party collection agencies. A first-party agency tends to be a branch of the company who is owed a debt. An example would be a bank contacting a debtor when they fail to make a mortgage payment. On the other hand, a third-party agency is an outside company, hired to contact debtors on behalf of their clients. If the bank hired “Average Joe’s Collections” to contact the debtors, it would be an example of a third-party collection agency.

Both models have their advantages and disadvantages. What one has to remember is that a first-party agency is, for all intents and purposes, the company that is owed money and may have to deal with debtors in the long run. As such, they have to try and maintain a relationship with the debtor. On the other hand, a third-party agency is only out to get the money the debtors owe.

Don’t think this means collection agencies are going to just come in and throw you out on the street until you pay. Laws, such as the FDCPA, have been enacted in order to protect the debtor from being overtly harassed by collection agencies. Such laws prevent third-party agencies from conducting practices such as calling a debtor at unreasonable hours or failing to cease communication when requested. It also requires agencies to state to debtors who they are and who they represent. First-Party agencies are not law bound to follow these restrictions, as they are technically the company that is owed a debt, but they usually follow them regardless.

It seems like having to deal with a collection agency is a waking nightmare. It is daunting, but there is always hope. Despite the image of evil collection agencies has gained, they are still a vital part of a business. When debts are paid, it is up to these agencies to work with debtors to find a way to resolve this in a legal manner.

Rapid Recovery Solutions is a full service debt collection company that can help you collect your funds. Contact RRS today for additional information!. Unique version for reprint here: Understanding The Deal With Your Collection Agency.

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Article Citation
MLA Style Citation:
Iii, Ken G. "Understanding The Deal With Your Collection Agency." Understanding The Deal With Your Collection Agency. 17 Oct. 2012. 6 Jul 2015 <>.

APA Style Citation:
Iii, K (2012, October 17). Understanding The Deal With Your Collection Agency. Retrieved July 6, 2015, from

Chicago Style Citation:
Iii, Ken G. "Understanding The Deal With Your Collection Agency"

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