Vacation Packages

Collection agencies pursue payments of debts owed to creditors by businesses or individual. First-party agencies are from the creditors internal collection department that may have a separate company name, address, and phone number to give the appearance of an outside agency. They believe that debtor will take it more seriously if it seems to come from another company. Third-party collection agencies will often purchase debts from from creditors at a small percentage due to debts being designated as charge-offs by the creditor.

The third-party agencies profits come from the difference between what they paid initially for the debt and what they can collect from the debtor. The main method of communicating with debtors is via phone calls or mail letters. According to the federal Fair Debt Collection Practices Act of 1977, agencies are only allowed one phone call a day and no more then three a week, though some collection agencies ignore this knowing that debtors are not familiar with the regulations.