2. Agenda Debt Collection Definition Types of Collections A Flowchart Debt Collection Legal Aspects Top 10 Collection agencies in US Credit Bureaus and Credit Reporting Sources of Money (SOM) Payment Options Strategies used for liquidation Collection Call Flow Collection Pyramid 3. What is Debt Collection? Debt collection is a simple mean that pursues payments on debts owed by individuals or businessesDebtcollection can be done in various ways:1. Legal notification 2. Lettering 3. Via Phone Calls4. Legal proceedingsDebt collection can be either done by original creditor by their in house collections department or by any third party collection agency appointed by original creditor 4. Types of Collections 5. First / Third Party Collections Consumer Collections Commercial Collections PLCCs Telecom Medical Bills Auto/Home Loans IT & Automation Waste Management Financial Services Login Hour based billing model Contingency / Commission based billing model Pre charge off accounts primarily 0-180 days Post Charge off accounts Small ticket size/ Dialer Environment Big ticket size/ Dialer + Manual 6. Debt Collection Laws There is a federal law that dictates how debt collectors mayand may notdeal with consumers. Its called the Fair Debt Collection Practices Act (FDCPA), and it applies to personal debts, including money owed for an auto loan or home loan, for medical care and for credit card accounts According to the Federal Trade Commission (FTC), under the FDCPA, a debt collector: 1.May not call you before 8 a.m. or after 9 p.m.; 2.May not call you at work, if the debt collector knows that your employer does not approve of such phone calls; 3.May not harass, oppress or abuse you; 4.May not lie, and may not falsely imply that you have committed a crime; 5.May not use unfair practices to try to collect a debt; 6.Must identify himself or herself to you on the phone; and 7.Must honor a written request from you to stop further contact. 7. Top 10 collection Agencies in US 8. Credit bureaus in the U.S. There are three major credit bureaus in the US and then there are other sub bureaus which fall under these three. Trans-union Equifax Experian 9. Why is Credit Reporting Important?
Credit reporting helps in repairing consumers credit score
10. Helps build consumers credit worthiness 11. Every time an account is paid off, has to be reported to the Credit Bureau 12. In third party collections credit reporting Is usually done by third party collection agency 13. In the case of First Party Collections reporting is done by the original creditor 14. Post paying off the account, even the consumer can contact any of the credit bureau and get the status updated with the help of the final notification from the collection agency. This is more relevant to third party collections scenario, usually when a consumer settles or pays off his/her old outstanding debt