What is a collection agency?

A collection agency is a business that specializes in collecting money from people who owe money to creditors, such as banks or credit card companies. Collection agencies are typically hired when a person has fallen significantly behind on their payments and a creditor no longer feels they are able to collect these payments themselves. In California, collection agencies must adhere to the regulations set by the Fair Debt Collection Practices Act, or FDCPA. This Act states that collection agencies cannot harass, oppress, or abuse any person in connection with the collection of a debt. It also prohibits deceptive practices, such as falsely representing the amount of the debt or threatening action that cannot be taken, like jail time. In addition, collection agencies must be licensed by the California Department of Justice and abide by a set of ethical practices. Collection agencies may attempt to collect the money owed to creditors in a variety of ways. They may contact the debtor by phone, mail, or email. They may also attempt to negotiate with the debtor for a payment plan or other type of arrangement. If all of these attempts fail, the debt may be sent to a collection law firm who is responsible for obtaining a court judgment against the debtor. If you have received a collection notice from a collection agency, it is important to understand your rights and responsibilities under the Credit Repair Law in California. You have the right to dispute any inaccurate or incomplete information the collection agency is reporting and to ask them to validate the debt. You also have the right to seek out legal assistance to assist with resolving any disputes.

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