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Ohio Debt Collection Agencies: What Are They?
Defend Against Creditors Who Violate the Law.
If you believe debt collection agencies are harassing you unfairly or violating the law, LHA can help you fight back.
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What Is a Collection Agency?
Debt collection agencies are businesses that attempt to arrange payments on past-due accounts. There are various collection agencies, but most of them operate by contacting the debtor via telephone or mail and trying to collect on a debt. Though, some practices by debt collection agencies are not appropriate or legal.
Topics we’ll cover in the following video:
- How do collection agencies work?
- What is the difference between a first-party and third-party creditor?
- How do collection agencies make money?
- What is a debt buyer?
Time: 4:45
First-Party Creditor & Third-Party Creditors
In Ohio, the legal protections you have depend on the type of debt collector.
First-Party Creditors
A first-party creditor is the originator of the credit card, auto loan, personal loan, product, or service you used, received, or obtained. Typically, first-part creditors are credit card companies, loan companies, medical providers, and other types of businesses or organizations that may issue credit. They are not subject to the same legislation that regulates third-party collections.
Some companies use first-party agencies to collect on debts instead of third-party agencies. These first-party agencies are subsidiaries or affiliates of the original creditor. While their objective is to collect on the debt, these agencies typically do better at maintaining the customer relationship. Like first-party creditors, these companies are not guided by third-party collection legislation.
Third-Party Creditors
A third-party creditor is typically a collections agency or debt buyer and is not part of the original agreement between the first-party creditor and the debtor. The originating creditor contracts third-party creditors to handle accounts receivable issues such as delinquent and past due debts.
These businesses are contracted by the original creditor – or bought outright by debt-buyers – and attempt to collect the debt over a specified period. Most agencies will collect on the debts for a 30-day to 6-month period. In some cases, accounts can be held at an agency for a year or several years.
Most consumers associate debt collection with third-party agencies. They are also the collectors most associated with violations and abusive tactics. If you’re dealing with overwhelming calls from collectors, contact a lawyer.
Not Just Any Debt Attorney
Jeremiah E. Heck is a founding partner of LHA. As a leader in consumer law, he fiercely protects against unfair treatment by debt collectors.
How Do Collection Agencies Work?
Collection agencies hire employees to contact people who owe money. They access past due accounts and call or send letters to those account holders, pressuring them to pay what is owed.
Ohio collection agencies, and those throughout the United States, do not always follow the law when collecting on debts. According to the Federal Trade Commission (FTC), collection agencies have the second-highest rate of complaints.
How Do Debt Collection Agencies Make Money?
First-party creditors have one major goal: Get the original debt covered.
Third-party collection agencies usually have other plans. They often buy past due accounts for much less than is due. For example, if you owe a credit card company $1,000, a third-party collection agency might only pay $40 and assume the debt. Then, they attempt to collect the entire amount, making a substantial profit. They may even sue you and add legal costs and other unnecessary fees.
Collection Agencies You May Have Heard Of
Many debt collection agencies operate nationwide. Here are some of the largest:
- Atradius Collection
- Summit Account Resolution
- PRA Group
- The Kaplan Group
- MNS Credit Management Group
- Rocket Receivables
- Rozlin Financial Group
- Encore Capital Group
- ACA International
- Consumers Financial Protection Bureau
- National Consumer Law Center
- ARRMS (India) Private Limited
- Direct Recovery Associates Inc.
- The EOS Group
- Maxim Credit Management Services
- Cedar Financial
- Debt Collection India
- Debt Nirvana
- Unified Credit Solutions Pvt. Ltd.
- Afford Motors India Pvt. Ltd.
- CreditNirvana
- Recoupex
- Pair Finance
- CollectionHub
- Captira
A more comprehensive list of debt buyers is available here.
Illegal Collection Tactics Used by Debt Collection Agencies
When attempting to collect debts, many debt collection agencies frequently violate FDCPA and FTC regulations covering:
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Harassment
According to the FDCPA, third-party debt collectors may not harass, oppress, or abuse you. This includes threats of violence, obscene or profane language, and repeatedly calling to annoy you.
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False Statements
Third-party debt collectors are prohibited from lying when trying to collect a debt. For example, they may not claim to be attorneys or from the government, claim you have committed a crime, or misrepresent your account details. They may not threaten a lawsuit unless they intend to file one.
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Unfair Practices
Third-party collectors may not use unfair practices when trying to collect a debt. For example, they may not collect additional interest or fees on top of what you owe, deposit a post-dated check early, or threaten to take your property unless they can legally.
Dealing with Debt Collection Agencies
As a debtor, you have rights under the FDCPA. When dealing with these agencies, you should not allow your personal feelings to get in the way of your negotiations. These agencies frequently force consumers to make financial arrangements with them that the consumer has no way of fulfilling.
A debt collection agency has one objective: to generate revenue. The revenue they receive is determined by how much they can collect from a debtor and how quickly they can collect it.
The payments they recommend may not be your best path out of debt. That’s why you should seek professional help to find genuine debt relief.
Why Work with a Debt Lawyer
Although you do not have to work with a lawyer when debt collection agencies begin contacting you, seeking legal representation is best to protect yourself.
Protect Your Rights
If your federal or state rights are violated, you may have a legal claim against the debt collector and a right to financial compensation.
Representation for Debt Lawsuits
If a first- or third-party debt creditor sues you, you will need help from a debt lawyer to go to court. By seeking the help of an attorney early, you can ensure that your legal documents are correctly drafted, and all deadlines are met.
Get Debt Relief Quickly
If you are behind on your debts, you have options. You may be able to reach a settlement agreement with creditors, or bankruptcy might be right for you. A consumer law attorney can help you decide what is best for you.