A collection agency is a business that pursues payments on debts owed by individuals or businesses. Most collection agencies operate as agents of creditors and collect debts for a fee or percentage of the total amount owed.



Some agencies, sometimes referred to as "debt buyers", purchase debts from creditors for a fraction of the value of the debt and pursue the debtor for the full balance. Creditors typically send debts to a collection agency in order to remove them from their accounts receivable records; the difference between the amount collected and the full value of the debt is then written off as a loss.

In many countries, such as in the US, collection agencies are governed by laws that prohibit certain abusive practices. Failure to adhere to such laws may result in lawsuits or government regulatory actions. Learn more about this with the North Carolina collection lawyer.

The Federal Trade Commission is the primary federal regulator of collection agencies. Many states and a few cities require collection agencies be licensed and/or bonded. In addition, many states have laws regulating debt collection, to which agencies must adhere.

The Fair Debt Collection Practices Act is the primary United State Federal law governing debt collection practices. The FDCPA allows aggrieved consumers to file private lawsuits against a collection agency that violates the Act.

Alternately, the Federal Trade Commission or the state Attorney-General may take action against a noncompliant collection agency, including issuing fines, ordering damages, restricting its operations or even closing it down. More information about this with the North Carolina collection lawyer.

In addition to state and federal laws, a majority of U.S. collection agencies belong to trade group ACA International and agree to abide by the association's code of ethics as a condition of membership. ACA's standards of conduct require its members to treat consumers with dignity and respect, and to appoint an officer with sufficient authority to handle consumer complaints.

Consumers may also resolve disputes brought against a collection agency who is a member of ACA through ACA's consumer complaint resolution program. For more information about legal issues that arise from collection matters, then visit the North Carolina collection lawyer for more information.