Debt collectors are legally obligated to contact borrowers and attempt to collect on a debt that has gone into default. Debt collectors are third-party collection agencies that buy old debts from lenders for a fraction of the original amount. They are then tasked with tracking down the consumer who owns the debt and trying to collect. If the debt is not repaid, debt collectors then have the right to take legal action against the borrower.
The Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act (FDCPA) was designed to protect consumers from harassment by debt collectors. The act outlines rules for what practices collectors are allowed to use when attempting to collect a debt. This includes prohibiting debt collectors from calling late at night or early in the morning, calling after 9 pm or before 8 am, and calling the borrower at their job if the borrower requests it. It also forbids debt collectors from discussing the debt with anyone but the borrower or their authorized representative.
Debt Collection in the Digital Age
In recent years, the debt collection industry has become increasingly digitalized. Technology is being used to automate tasks that were previously labor-intensive, such as searching for a person’s address or phone number, and analyzing a debt case to determine the right collection strategy. This has allowed debt collectors to increase their efficiency and reduce their costs. It has also enabled them to collect on more debts in a shorter period of time, leading to a higher success rate.
Conclusion
Debt collectors are third-party collection agencies that are legally obligated to contact borrowers and attempt to collect on a debt that has gone into default. While debt collectors must adhere to the Fair Debt Collection Practices Act, technology is now making it easier for them to collect on more debts effectively and efficiently. Knowing your rights under the FDCPA and understanding the changing landscape of debt collection in the digital age can help you prepare for what to expect from a debt collector if you ever find yourself in a situation where you are faced with being contacted by one.