How Does a Collection Agency Work?

How does it work?

Recovering outstanding balances from slow and non-paying customers can be confusing – especially if you are a business owner who never intended to track down past-due payments. Luckily, collection agencies exist to help businesses get paid for their work. At Kinum, Inc., we are passionate about helping businesses recover debts and help consumers get on the track to repaying their debt. In this blog post, we break down what a collection agency is and how it works.

If you are interested in handing off your debt collection to a professional team, contact Kinum, Inc.! We have offices in Indianapolis, IN, Virginia Beach, VA, and Cleveland, OH, that proudly serve businesses nationwide with their debt collection efforts.

What Is a Collection Agency?

A collection agency works on behalf of a wide array of businesses to recover past-due funds. Businesses will usually make multiple attempts to collect unpaid dues before contacting a collection agency for assistance. After 60 to 180 days, the collection agency will step in. Debt collectors are strategic and professionally trained to know how to properly recover past dues for their clients.

Collection agencies only make money when the debt is collected; therefore, they are determined and will work ceaselessly to recover the debt. However, they are also willing to work with the consumer if they are unable to repay the debt in full. At Kinum, Inc., we negotiate with flexible payment plans to make it more feasible for consumers to repay.

What Can a Collection Agency NOT Do?

There are laws through the Fair Debt Collection Practices Act that restrict ways that collection agencies can contact consumers. Below are a few of the regulations that debt collectors must adhere to.

Call at Inappropriate Times

A collection agency may only call a consumer between 8:00 AM and 9:00 PM local time to the consumer. Calls to work are not permitted at your place of employment if they have reason to believe that you are not allowed to receive calls while at work. Also, making repeated calls to the point of harassment is prohibited.

Send Visibly Marked Mail

A collection agency may send you mail, but it must be unmarked, so anyone who sees it would not know it was from a debt collector. It also may not be a postcard because it would be visible to anyone else who handles the mail.

Contact Family and Friends

A debtor’s family and friends may be contacted if the agency doesn’t have their contact information; however, they are not allowed to disclose the existence of the debt.

Not Disclose Who They Are

A collection agency must let the debtor know who they are and their intentions. They also must disclose that any information the debtor provides may be used to assist them in their collection efforts.

Make Threats

Debt collectors are allowed to be persistent, but they may not threaten, use profanity, or publicize the debtor’s information. They also may not lie and threaten to file a lawsuit when they have no intention of doing so.

How to Manage Collection Agencies as a Consumer

Pay Your Debts

Although it may be easier said than done, a collection agency wants you to pay your debts and will work with you to create a payment plan that is feasible for you. If you ignore the calls and messages from the collection agency, they may file a judgment against you, so money could be taken from your paycheck or assets. Once you pay your debts off, you can feel good about getting that weight off of your shoulders and go on with your life without having to worry about debt collectors calling you.

Prepare for the Conversation

Don’t get blindsided when the collection agency calls. Prepare how you want to handle the situation ahead of time and take control of the conversation when they call. Ask for a debt validation letter and schedule another call once the letter is in your possession. This gives you time to make a plan and accurately identify the collection agency.

Need Help?

Kinum, Inc. is a professional collection agency that serves businesses and debtors nationwide. We can answer your debt collection questions and help you create a payment plan. When you need help navigating debt collection or if you are a business owner that needs professional assistance, contact us today. We are eager to help all parties involved!

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