In the commercial collection industry, every debtor is a potential source of profit. Anybody might need to borrow money for the purpose of business. Any amount of loan is as important as the other. In fact, small borrowers form 30% of annual turnover in the financing industry. Such borrowers include:
The players in the financing industry help to drive this reality. A first party creditor is company that originally lent the money or extended the credit at issue. These original creditors are not subject to the Federal Fair Debt Collection Practices Act. The employees of the first party creditor are responsible for:
To ensure a positive cash flow, these original creditors often hire third-party debt collection agencies or individual collection agents to recover the debt. Many a lender, like credit card or insurance companies, take such action only 60 days after the debt was due, or even earlier. If a loan collection process is more expensive than the amount of the loan itself, the original creditor may not be willing to try very hard to collect. These creditors often write off these loans. They may then sell these debts to third-party collectors at fire-sale prices. Third-party collectors, although governed by the FDCPA, operate by a different set of rules.
Third-party collectors often start by sending a series of increasingly urgent letters instructing the debtors to