What is the difference between a debt collector and a creditor?

A debt collector and a creditor are two different types of parties involved in consumer debt. A creditor is the person or organization that has extended a loan such as a bank or a credit card company. They are the ones that provide the loan and are the original lender of the money. A debt collector, on the other hand, is a separate company that may have been hired by the creditor to collect a debt. This collection agency is not the lender of the money and typically works on behalf of the creditor. Debt collectors try to contact the consumer to set up a payment plan or to collect the full amount due on the debt. Debt collectors also have their own set of rules that they must follow, known as the Fair Debt Collection Practices Act. This federal law provides consumers with protection against abusive and unfair debt collection practices. In California, there are additional protections for consumers under the Consumer Debt Defense Law. This law establishes rules and regulations to ensure that debt collectors are acting in a fair and reasonable manner when collecting debts from consumers. Overall the main difference between a debt collector and a creditor is that the creditor is the original lender of the money while the debt collector is a separate company that may have been hired by the creditor to collect the debt. Both entities are subject to state and federal laws which provide consumers with protection against unfair collection practices.

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What is the difference between a debt collector and a creditor?

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