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Dealing with Debt Collectors

Many consumers are shocked at the tactics used by some debt collectors.  While there are likely many debt collectors that seek to comply with the law and treat consumers with respect, there are also many others that seem to care little about the law.  A consumer must understand the motivations behind and the mechanics of debt collection in order to intelligently deal with a debt collector.

Money is the Motivating Factor

Debt collection is about one thing:  money.  Debt collection agencies exist to extract money from consumers and give a portion of that money to their "clients."  Collection agencies' "clients" are the alleged creditors of the consumers from whom the collection agencies are attempting to collect money.  If a collection agency fails to satisfy its clients by collecting a large enough percentage of the dollar amounts of the accounts placed with the agency for collection, then the agency's clients will recall their accounts.

The pressure to collect money begins with an agency's clients.  Clients purportedly hold debts which for which they are the creditor, and they want as as large a portion of the debts collected as possible.  A large, corporate client might place its accounts for collection with several different collection agencies.  This enables the client to play the agencies against each other and threaten to retain only the agency that produces the greatest results.  An agency owner understands that she will only be able to remain in business if her agency satisfies her clients by collecting more money than other agencies.  Therefore, she puts pressure on her upper level collection managers to collect as much money as possible.  Those managers realize that their management positions, and ultimately their jobs, depend upon their ability to motivate their employees to collect the most money possible.  Further, those managers might have "leads," or mid-level collection managers.  Upper-level managers put pressure on the "leads" to collect as much as possible.  When a call is finally placed by an individual debt collector, it is placed with the understanding of and in response to the pressure brought to bear by clients, the agency owner, upper-level managers, and the debt collector's "lead."  The debt collector understands his goal:  collect money from the consumer - now.  The debt collector does not want money later.  The debt collector wants and needs money now.  Further, the debt collector understands that he will keep his job and earn bonuses only by collecting money in as large amounts and as fast as possible.

The "Players:"  Creditors, Debt-Buyers, and Collection Agencies

There are three primary "players" in the debt collection business:  creditors, debt-buyers, and collection agencies.  Each "player" has a different role and motivation.  Further, while the "client" described above is usually a creditor or debt-buyer, it can in some cases be a collection agency.  If a collection agency is particularly adept at obtaining business, but perhaps not as adept at collecting all the accounts that are placed with it, it might in turn place accounts it received from its client with yet another collection agency for collection.

A creditor is a person or entity to whom a debt is owed by a consumer.  There are innumerable categories of creditors.  Credit card companies, finance companies, banks, credit unions, hospitals, and cable companies are examples of companies that can be creditors.  An "original creditor" is the creditor that originates a debt.  A creditor will usually attempt to collect debts owed to it.  However, if it is unsuccessful, it might place its past-due debts with a collection agency for collection.

A debt-buyer is a person or entity that purchases debts from a third party.  Once it properly and legally purchases a debt, it become the creditor for that debt.  A debt-buyer is never an original creditor, and it usually purchases debts that are already in default.  Some debt buyers attempt to collect their own debts, while others place debts with collection agencies for collection.

A collection agency is generally a person or entity that collects debts owed to another.  A collection agency might owns debts it attempts to collect, in which case it might also be a debt-buyer.  However, most collection agencies simply attempt to collect debts for original creditors and debt-buyers.

Communicating with Debt Collectors

A consumer must decide how, if at all, he will communicate with a debt collector.  Some consumer advocates argue that a consumer should never talk to a debt collector on the telephone.  Seasoned debt collectors spend hours on the telephone each day talking to consumers who allegedly owe debts to the debt collectors' clients and overcoming all reasons given by consumers for failing to pay the debt collector for the alleged debt.  Most consumers are no match for such seasoned debt collectors.  If a consumer chooses to communicate with a debt collector, if practicable and appropriate, the consumer should avoid telephone conversations.  Instead, if reasonable, a consumer should consider communicating only by mail, sent certified, return receipt requested.

If you are being harassed by a debt collector, complete the "Contact Us" form or call us at (214) 670-9989. If you would prefer to give more detailed information about your case, and you don’t have time to discuss it by telephone, feel free to complete this form - case submission form.