Do Credit Collectors Buy A loan Or Just Collect For The Original Lender?

Question

If they are NOT the new owner of the loan, why should I even discuss the account with them, give them any private information.
I know someone who struck a deal with one and got a call back the next day saying the original creditor denied it.
So why deal with these guys, if they can't make a final decision?

Answer 1

Some debts are purchased by collection agencies, other debts are just assigned to the collection agencies.

Never speak to collectors by phone, always do "everything" in writing and sent certified mail return receipt.

If you hadn't requested validation of the debt yet, you should before you start talking pay.
Make them prove that the amount they are demanding is the correct amount and hasn't been illegally inflated, that they are licensed and/or bonded in your state if your state requires it, that you are still within the legal collecting SOL for your state and that they even have the right to collect on that account.

The proof of the account and the amount owed must come from the files of the original creditor and not just some computer printout, a lame piece of paper showing an amount due or affidavit of debt from the collection agency.

If you are still within the collecting SOL and the debt was just assigned to the collection agency, you could try dealing with the original creditor and request upon payment, among other things, that they pull the account back from the collection agency and request the collection agency delete any negatives they had placed on your reports.

If you are out of the collecting SOL, you have a legal right to notify the collection agency that the account is past the SOL for collections and to take a hike.

Answer 2

Both. Some credit agencies collect on their own accounts and keep them forever. Some collect for a while and after a certain point turn them over to a company they have a contract with to continue collections. If that company retrieves any funds from the customer, they have a deal with the original company to keep a percentage of the amount collected. Other companies buy and sell "paper" or portfolios of credit accounts or loans that may or may not be worth a certain amount of money. They continue collections on these accounts and keep whatever they collect. Almost all collectors are aggressive because their bonuses depend on what they collect per month. Read over the FDCPA (Fair Debt Collections Practices Act), which outlines what they are allowed and not allowed to do. It also outlines your rights as a consumer.

Answer 3

If a company claims to represent a debtor then demand that they furnish you a copy of the agreement between the original lender and the collection company.. Tell them that you will settle the debt if they can prove to you that they have written confirmation that you owe it.. demand them to show evidence that you created the debt. tell them you want a copy of the original agreement. Get their name and address so you can send them a letter that states you are protected by federal law that states they may not contact you by phone. Write the letter and send it to them that they are instructed to contact you by mail only.. that will stop the calls.. the federal law does have some teeth in it.. Most collection companies buy the old written off debt from lenders for a few cents on the dollar.. they pay for the list.. none of the money you pay on the debt will ever get to the original lender.. some of the collectors will try that ploy that the original lender refuses to accept the promised amount.. if that happens to you then call the original lender and ask them to give you a payoff amount.. they will probably tell you that it is in the hands of a collection agency..if they do, then ask them which one.. five will get you ten that they can't tell you.. they will probably use some excuse such as we are not allowed to give out that information.. if they say that then tell them that you have just recorded the conversation and you are going to report it to the federal authorities.. get the persons name and phone number.. tell them you are going to file a complaint with the federal authorities for violating your civil rights.. push them and push them hard.. and see if they will back up.. don't let them push you around.. push back and push back hard.. the law is on your side.. use it..