Collection agencies are hired to collect on past due accounts by creditors; this may be on a personal or business loan. Some debt collection agencies will purchase the delinquent accounts from creditors for a fraction of the cost and then will pursue the debtor for the entire amount of the debt. Most of the debt collection services are hired as agents of the creditor and will collect the debt for a fee or even a percentage of the amount owed. For the best chance of being able to collect on a defaulted loan, the sooner it is turned over to a company for collection the better, as the chance of collecting decreases rapidly as time passes. In most countries, as well as the United States, there are certain laws that govern such agencies and prohibit certain actions and behaviors that may be abusive in nature. It governs on how and when collection agency calls are delivered. If they fail to comply with these laws, then it can result in lawsuits and possibly government regulatory actions. While the primary federal regulator of agency collection is The Federal Trade Commission (FTC), there are many states that have their own requirements that must be adhered to in order for the agency to pursue collections in their state. The Federal Trade Commission and even a state Attorney General have the authority to impose fines, to demand payment of damages, to shut them down or just restrict their activities. The Fair Debt Collections Practices Act is the primary federal law that governs debt collection agencies and it allows a consumer to file a private lawsuit against a collection agency that violates the act and will also make recommendations concerning collection agencies for non-compliance of regulations. In addition to federal and state laws, most of the United States debt collection services belong to a group called ACA International (Association of Credit and Collection Professionals) and agree to abide by their code of ethics as a condition to membership. Basically, ACA's standards require the members to treat consumers with respect and dignity; they also appoint an officer with sufficient authority to handle consumer complaints. Before filing a complaint with the Federal Trade Commission, you may want to consider finding out if the agency is a member of the ACA. This would allow you to file a grievance through their consumer complaint resolution program against the debt collection agencies, which may save you some time and energy. Often times, this type of resolution can be done quicker than filing on the federal level. Of course, if you are not happy with the results, then you should then go ahead and lodge your complaint with the FTC.
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