The Debt Business is Booming

09/19/2017

It would seem that human instinct is to hide from collection agencies. We don't answer the phone when they call and we fail to respond when they file suit against us. As natural as it seems, hiding from the problem is the worst way to deal with it. Responding to a lawsuit from a collection agency could be the fastest way to make it all go away.

This is a problem the industry created for itself and it's doubted anyone will feel sorry for them. Just the same, let's take a look at how debt collection in Australia has grown in recent years and how all the selling and trading of debt from one company to another can actually benefit the consumer.

Debts are typically sold or assigned to third party debt collectors when the original creditor feels the debt is no longer collectible. The original creditor is the party with whom the debtor receives an extension of credit or to whom the original debt is owed. These include credit card companies, banks, and mortgage companies. The original creditor sells the debt in portfolios or in bulk to third party collection agencies for around four cents on the dollar. The debt collection agency will then attempt to collect on the debt for the full amount allegedly owed to the original creditor.

The collection agency purchasing the debt generally acquires merely an electronic file containing the debtor's name, account number, personal contact information, and any personal or professional references the collection agency may have utilized in their efforts to collect the debt through nsw debt collector.

However, what's often not included in those files is essential information necessary to prove the debt is owed or providing the collection agency with "personal knowledge" of the account. Nonetheless, it is generally not purchased as part of the debt portfolio.