What is a collection agency?

A collection agency is an organization that specializes in collecting past due debts and unpaid accounts from consumers or businesses. Collection agencies work on behalf of creditors, such as banks, credit card companies, or loan companies, to attempt to collect on past-due debts or unpaid accounts. Collection agencies have certain rights defined in the federal Fair Debt Collections Practices Act (FDCPA) that they can use to collect these debts, such as contacting debtors directly to negotiate payment plans. Collection agencies also may turn over unpaid accounts to lawyers or take legal action such as filing lawsuits. In Florida, collection agencies must be licensed with the Florida Department of Financial Services and must adhere to certain laws, such as the Florida Consumer Collection Practices Act, that regulate how all types of creditors can collect on their debts. Additionally, the National Credit Repair Organizations Act, which applies to credit repair organizations in Florida, requires that any company that claims to provide credit repair services must be registered with the Florida Department of Agriculture and Consumer Services.

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What is a collection agency?

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