Debt Litigation & Recovery Services
A debt litigation recovery service is a commercial debt collection company. These companies primarily buy long-standing unpaid debts from banks, credit card companies, store cards and unsecured loans. These companies must adhere to government laws and respect consumer rights.
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Debt recovery companies buy people's debts for much less than the value of the debt. However, they ask debtors for the full amount owed. These companies must follow government guidelines when pursuing debts. In the United Kingdom, the Office of Fair Trading Debt Management Guidance 2003 sets out the operational regulations for debt recovery. In the United States, the Federal Trade Commission Fair Debt Collection Practices Act regulates debt recovery companies.
Consumer Rights
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A debt recovery company cannot force a debtor to make repayments above an affordable amount. If a debtor is only able to make a partial monthly payment, the debt collectors must accept it, nor can they add a penalty charge for non-payment. The debt collection company must also send a written "validation notice" within five days of first contact with a debtor, usually by phone. Debt recovery services must not harass debtors, this includes repeatedly phoning the debtor or their employers. Nor can they make false claims about who they are or the amount of the debt, or threaten arrest.
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Consumer Complaints
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Consumers should report any problems with debt collection companies to their state Attorney General's office and the Federal Trade Commission. Some states have laws that differ from FTC regulations and consumers are advised to find out the state-specific laws. The FTC informs consumers about their rights, investigates complaints and is the first port of call for anyone experiencing problems with debt recovery services.
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References
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