Collection agencies are an integral part of any business that extends credit to its customers. A collection agency is typically in the business of pursuing debts owed by businesses or individuals. For example,
collection agencies Florida operate as agents for creditors in Florida, or that have debts in FL and collect debts for a fee.
Collection Agencies Florida
Many times a creditor company has its own subsidiary company involved in the business of collecting debts of its parent company. Known as first party agencies, these are not debt collection agencies in the strict sense of the word. Collection agencies Florida basically refers to third party agencies that are not party to the original contract that resulted in the debt.
Typically, a creditor would assign accounts to one of the collection agencies Florida on contingency-fee basis. The initial cost to the creditor is limited to the cost of finding collection agencies Florida and communicating to the one that is selected. Most collection agencies Florida operate of no collection – no fee basis. They collect their fee only if they are able to collect the debt, which may or not be the full amount. The collection agencies Florida make money only if they collect money, typically a percentage of the amount collected. The actual percentage depends upon the type and age of the account and whether any previous attempts were made to collect.
There is also a distinction between soft collection and hard collection service. In soft collection, the agency sends reminders, often at weekly or bi-weekly intervals, asking debtors to pay the amount directly to the creditor failing which collection action will be initiated. A soft collection fee is often a flat amount paid to the collection agency regardless of whether the debt is collected or not. Regular collection rates apply only in case there is no response from the debtor after several reminders.
A fair amount of collection agencies Florida also function as debt buyers. These agencies purchase accounts at a discounted value and pursue the debtor for the full amount. Debt buying is often at huge discounts as it is tantamount to transfer of risk. The original creditor relinquishes the right to recover and the account becomes the property of the debt buyer.
Collection Agencies Florida
However, collection agencies Florida provide a service and operate on the basis of a contract. It is a negotiated agreement between the customer (creditor) and the service provider (agency). As long as the contract does not violate any existing US law, both parties can agree to almost any term or condition including how and much the collection agency gets paid. As the collection agency operates on your behalf, the contract may also include a clause that the collection agency will not use unnecessary force on the debtor or indulge in unlawful activities.
Collection agencies Florida who work on commission are highly motivated and will go to great lengths to convince debtors that it is in their own interest to pay up. However, debt collection in USA is highly regulated. Collection agencies are required by law to adhere to the provisions of the Fair Debt Collection Practices Act, the Office of Thrift Supervision, the Federal Trade Commission as well as State laws including Title 33, PART VI. Florida Consumer Collection Practices and regulatory agencies.