Collection agencies are third-party companies that collect past due balances on behalf of the original creditor or buy bad debt from businesses below market value in the hope of collecting the debt and turning a profit. However, many collection agencies collect their money in the same manner.
Letters
Most collection agencies will begin with a series of collection letters. They must begin by giving the debtor the opportunity to dispute the validity of the debt. From that point, if the debt is deemed legitimate, future letters attempt to compel the debtor to pay the debt.
Phone Calls
Many collection agencies utilize telephone calls to collect a debt. These may range from a polite attempt to reach a compromised payment to an indelicate attempt to pressure the debtor into making a payment.
Report to Credit Bureaus
Collection agencies may also report the past due debt on the debtor's credit report. This is not a direct attempt to collect the debt, but it may prompt the debtor to pay the debt to clear their credit report.
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