Welcome to debt collection 101. Here you will learn the ins and outs of debt collectors, otherwise known as bill or account collectors, or collection agents. The main task of a debt collector is to find a debtor (a person who owes money to a creditor) and to attempt to collect payment on accounts that have gone delinquent. There are two types of debt collectors. The first type is the most common. These are called third party collectors, and these people work for a third party collection agency. What happens in these situations is that a creditor will have a delinquent account that it will hire out to a third party collection agency, who will then tell the third party collection agent to collect on behalf of the creditor.
The second kind of debt collectors work directly for the original creditors. These are called in house collectors. In house collectors are not bound by many of the rules of the Fair Debt Collection Practices Act and the creditors that they work for are usually companies founded on finance, like mortgage and credit card companies, healthcare providers, or utility companies.
Regardless of who they work for, bill collectors all have similar duties: to locate the businesses or debtors, and to inform them that they are late on payment. Usually this will be done over a phone conversation, but sometimes debt collectors send letters.
Some of the time debtors are not so easy to find. Sometimes they could move without leaving a forwarding address, or new contact number. At times this is because they don’t want collection agencies to be able to trace them, other times this is simply a mistake or they have forgotten to.
At times like this collection agents may speak with the post office, former neighbors, telephone companies, and credit bureaus to get a hold of the new address. Doing this is called “skip tracing,” and the bill collectors who use this have computer systems automatically track when businesses or people change their addresses or contact information on any of their open accounts. To Be Continued In Parts 2,3, 4, and 5