In the last article of this series I described two different sorts of collection agents: in house collectors and third party collectors. In house collectors work directly for the creditor, while third party collectors work for a collection agency hired by the creditor to collect on delinquent accounts. I mentioned that third party debt collectors are bound by the rules and guidelines of the FDCPA, while in house collectors are not. The FDCPA stands for Fair Debt Collection Practices Acts and it is full of strict guidelines that third party collection agents must follow.

So, as you can imagine, many lawsuits spring up due to complications and confusions regarding collection agents and the regulations they have to follow: are they in house, or third party? Last article I brought up three examples, one being the Department of Education collecting on student loans. Anyone who works directly for the Department of Ed is not bound by the FDCPA, while the seventeen private third party collection agencies that it works with are. I described a law suit about a hospital that sent out pre-collection notices to patients with medical debts. If the hospital was ruled a third party collector, everyone who received that notice would have been absolved of their debt. In this case the hospital was ruled a creditor instead.

Finally, I brought up a personal situation I encountered with an in house collection agent that is sort of amusing and ridiculous but pertinent nonetheless. I am infamous for taking out books from my local library and never giving them back, so last summer it got to the point that they sent a debt collector after me! The debt collector called my third party house phone and left a message for everyone to hear about the intimate details of my “delinquent account,” and ask that either I return the books or pay the library for the cost of them. Fortunately for them, I love my library and was also aware of the fact that the collector was an in house, because she requested that I pay the creditor (the library) directly. I gave the books back, but let it be known that if I did not manage my finances as well as I do now, and had been called by a rude third party debt collector who did the same thing; there would have been hell to pay.

To determine if they are work with third party debt collectors or in house collectors in court cases, the courts will take a lot of ideas into consideration to rule if the FDCPA applies or not. If the creditor hired a collection agency outside of its company, the agency’s participation in the actual debt collection process must be minuscule. Questions the court will ask include: is the collection agency only a mailing service? Do they letters say if the debtor does not pay the debt will be referred for collection? (Third party collection agencies send out different letters, in house collectors send out these “warning” letters.) Is the collection agency only paid for sending letters?

If the collection agency is paid on commission, it is most likely a third party collection company. Again, if the agency receives the payments and then forwards payments to the creditor itself, it is most likely a third party collection agency. If a debtor does not respond to the letter and the collection agency has no further contact with the debtor, or if it does not get a hold of the files on the debtors, it is most likely not a third party collection agency. The lesson to be learned here is that when it comes to personal finance, it is important to know who you are giving your money to. A simple question as to whether you are speaking with a third party debt collector or an in house collector can guide the conversation because you will know their limits, like in the case of me and the library, or all of those people in the hospital that might have gotten away with not paying their medical bills.

Mallory Megan works for Rapid Recovery Solution and writes articles on commercial collection agencies Check here for free reprint licence: The Difference Between In House And Third Party Debt Collectors And Why It Pays To Know Who You’re Paying Part Two.

A third party collection agent is able to call the debtor’s place of employment, but they are restricted in what they can disclose. They are not permitted to inform an employer about a debt, or attempting to get a debtor fired. In general, a debt collector is restricted from discussing your debt with anyone but you and the credit bureaus, however in some states speaking with a debtor’s spouse is permitted.

While it may not be the best idea, according to the Fair Debt Collection Practices Act, a debtor can notify a debt collector in writing telling them that they want to stop further communication and the collection agent has to comply. The debt collector is usually permitted one more contact to inform the debtor how they intend to proceed with their case. While ceasing communication with debt collectors might seem relieving, it is essentially relinquishing control over your financial situation, and a debt collector is still fully capable of negatively marking your credit score or taking you to court.

A request to stop communicating has to be written, preferably citing the FDCPA and sent by Certified Mail, Return Receipt Requested. If a creditor was on the fence about whether or not to file a lawsuit against the debtor, the decision will usually be made right after this point, instead of being further delayed.

Again, just because the collection agent can no longer contact you anymore does not make the debt disappear. After a debtor has mailed a “cease and desist” notice to their collection agent, their debt will either be returned to the original creditor, passed on to another third party agency, or in rare instances, filed away simply as uncollected, all depending on the circumstances.

Try to remember however, when the debt collector calls, they often have the authority to offer you a repayment plan or a reduced amount to pay, which will absolve you of your debt so you do not have to worry about it anymore, and it will easier for you to pay. Even though they get a lot of bad press, most collection agents are for the most part personable and more than happy to work with you if you want to work out some sort of payment. It’s a win-win situation for both parties: your debt has been paid and the collector gets a nice commission check for the week to bring home.

Mallory Megan works for Rapid Recovery Solution and writes articles on new york collection agencies Also published at What If I Want A Collection Agency To Stop Calling Me?.

Debt collection agency American Profit Recovery began a fund raising attempt in order to assist people trying to bring relief to the Haiti earthquake victims. American Profit Recovery has chosen the Saint Rock Haiti Foundation which is a charity that provides medical care for the people of Haiti.

The collection agency will do three different things to come up with the money. One will be the donation of five percent of the proceeds from their biggest trade show. The money will come from all sales at the show in addition to any that come that they received at the end of February.

Employees were able to contribute by donating money to have the opportunity to dress casually on every Monday in February. Food purchased at their three locations will also go directly to Saint Rock Haiti Foundation.

American Profit Recovery chose Saint Rock Haiti Foundation after one of their employees brought the organization to its attention. And by picking this not for profit, it will have the ability to apply to the Grand Lodge of Masons over in Massachusetts to match their donation, which will of course double fund raising efforts.

American Profit Recovery is a bill collection agency with offices in Massachusetts, North Carolina and Michigan. Established in 2004, APR works primarily with the collection of third party debt in a good amount of professional industries such as trades, banking, medical, dental and lawn care.

APR has a striking focus on good business practices and diplomacy with consumers. They try to keep the relationship between client and debtor intact; their aim is to keep the business relationship going.

According to the most current studies, collection agencies that train their employees in empathy are the most successful; the latest trend. If someone is being contacted by numerous collection agencies, they are most likely to work with the collections professional that has shown compassion. More debt collection companies could take a lesson from APR and start giving back to the community.

Mallory McGuinness is employed by a debt collection company. Also she composes stories on business and finance, consumer spending and collection agencies. This article, Collection Agency Does The Right Thing has free reprint rights.