About Debt Collectors
"Know the enemy and know yourself and in 100 battles you will never be in peril." Sun Tzu (The Art of War)
Debt collection is a business and like most businesses, its objective is to make a profit. With this in mind, you can understand the principle that dictates how most debt collectors run their operations. Bill collectors will work the hardest to collect debts that they believe will provide the greatest rewards.
EXAMPLE: Debt $1500 debt owed by a consumer living in an upscale neighborhood will receive much more attention from a bill collector that a $300 debt owed by someone living in a depressed area. Bill collectors typically collect one-third commission on the amount collected. Thus the commission earned from collecting $1500 is $500 but only $100 for the $300 debt.
It simply makes economic sense for bill collectors to concentrate their resources where they expect to be most productive; this will increase the company’s profits and the commissions they earn. Thus, when they attempt to collect debts, bill collectors consider whether it pays to continue their efforts or whether they should give and cut their losses.
Disclosure in Debt Collection
When a bill collector contacts a consumer to collect a debt certain information must be provided about the debt and the consumer must be advised about certain rights he has regarding the debt collection process. These rights are contained in disclosure known as the "Validation Notice", the "Mini Miranda Warning' and the "Bill Collector Disclosure".
Information about the debt
Consumers must be advised of exactly how much money they are alleged to owe and to whom the debt is allegedly due. This must be done within five working days from the time the bill collector first contacts the consumer. This information is normally provided in the heading of the first collection notice.
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