Which law gives a third party debt collector the right to purchase a debt?
Question by Simple Words: Which law gives a third party debt collector the right to purchase a debt?
Does anyone know under which law a third party debt collector is given the right to purchase a debt from the original lender and then collect on it? If a debtor never borrowed any money from this third party, why should they have to pay them? I find that these collection agencies that purchase debts run their businesses by taking advantage of people’s misfortunes many times.
Also, why aren’t original lenders required to inform the debtor that their debt is being sold to a third party? For the longest time when I was behind on a debt I always thought that when they told me they were going to send my debt to collection, it was like a separate department within the company of the lender where they would close my account (so I wouldn’t be able to use it again), process to collect the debt, and report to the credit bureau.
Which laws support these debt collection practices?
Best answer:
Answer by sassy2
Your debt is the private property of the lender. They do not need a law to sell private property. You were told the overdue bill was going to collections. Ignorance of finances is not the company’s problem but yours. There is plenty of knowledge available on the internet that will instruct you on the proper way to handle overdue bills. How to Negotiate for less and so on.
Know better? Leave your own answer in the comments!
October 14th, 2010 at 10:40 pm
A debt that’s owed to someone is their asset. Your assets are your property and you can sell them. The fact that you misunderstood what a collection agency is, isn’t their problem.
October 14th, 2010 at 10:54 pm
Laws do not give anyone or any agency the right to do anything. You can do anything you want as long as there is no law against doing it.
So no one can produce any law that states it is legal to do something. There are only laws against doing certain things, and there are no laws against selling debt to agencies to collect.
October 14th, 2010 at 11:13 pm
If you read thru the contract you signed, there is undoubtedly a section that gives the creditor the right to sell the debt. That contract also obligates you to pay the third party collection agency that buys the debt.
Some companies do have in-house collection depts. However, they eventually give up on every getting paid and sell the debt to collection agencies. The original creditor recoups at least part of what you owe.
The alternative, which you may be seeing more of, is that the original creditor would just sue and get a judgment.
October 14th, 2010 at 11:24 pm
the fdcpa or fair debt collections practices act