Let us first understand how debt collection works before we look at the fallacies about debt collection agencies. Basically, you will incur debt when you incur expenses you did not pay for in cash. For example, credit card and mortgages are common examples of what people usually owe.
Having debts would make you debtor and the person or institution that lets you borrow the money is called the creditor. So where does the debt collection agency fit in all these? Well, they aren't part of the picture at first but when you fall behind in your repayment or even if an error occurred on the part of your creditor, your account may be assigned to a debt collection agency.
One of the most common fallacies about a collections is that laws forbid your creditor from giving your account to a collection agency for your debts to be collected. There is no concrete law that forbids these transactions, in fact, almost all kinds of debts can be turned over to a collection agency for them to be able to collect your debts.
Still another common fallacy that the public cannot seem to get rid of is the misconception that creditors are bounded by laws specifically the Federal Fair Debt Collection Practices. This act is basically just designed to protect the rights and the privacy of individuals in debt because it limits the methods debt collection agencies can use in order to collect your debt. For example, harassment and other abusive ways of debt collection are forbidden based on this act. However, this act does not forbid the collection agency from contacting you to collect your debts.
You should also be aware of another fallacy in debt collection. You should note that the Federal Fair Debt Collection Practices only cover third party collectors or debt collections agencies. This act does not cover the methods that your direct creditor can use to collect the debts you owe him so you cannot expect the same protection if the creditor himself is the one to collect the debts. Another fallacy is that your creditor and the collection agency cannot take you to court if you do not pay your debts. This is the most important fallacy you have to get rid of because it can get you into serious trouble.
But despite all the setbacks a debtor will deal with when their creditor avails of the services of a collection agency, these collection agencies are also victims of fallacies themselves.
Many people perceive collection agencies as abusive collectors that will surely harass them or their family if they would not pay. But in fact, this is usually not the case because most of these agencies are professionals and they stick to the laws. The harassments that you usually hear about are just a very small percentage of the overall debt collection efforts that occur everyday.
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