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Since I have been in the collection industry for nearly 30 years, what may be obvious to me, may not be to businesses that use collection agencies. I thought I would explain what the procedure is with a professional collection service once the account has been placed.
Initially we try to verify the debt is legitimate and the balance and interest is correct. Some businesses are confused as to what the legal interest is that can be added to an account while other businesses believe they can add interest and late fees. Once we have done the best we can to decipher how the balance was derived we begin the collection process.
A collection letter is mailed to the debtor stating the amount due and the name of the creditor that has placed the account for collections. The first notice is required to give the debtor thirty days to dispute the validity of the debt. Additionally, we must advise the debtor, “This is an attempt to collect a debt any information obtained will be used for that purpose.”
Although the notice gives the debtor thirty days to dispute the validity of the account the collection agency can continue to collect the account until the dispute is received. Assuming there is no dispute, once the letter has been mailed and the proper amount of time has lapsed to allow legal contact with the debtor, the next process begins.
The debt collector will make every effort to contact the debtor and collect the account voluntarily. If the collection agency cannot contact the debtor though mail or telephone the debtor is considered to be a “skip,” meaning the debtor has skipped meeting their financial obligation. Sometimes this is intentional and sometimes it is not. The job of the collection agency is to spend the time necessary to collect the money that is due.
“Skip tracing” can be very timely especially when trying to find someone who does not want to be found. The tools of skip tracing are many but can be as simple as the County Assessor or Auditors office.
Once the debtor is located and communication is initiated, the goal is to collect the money that is owed via promissory notes, debit card payments, credit card payments, check by phone payments or legal action which may include wage or bank garnishments and property liens.
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