Debt collection agencies deal with defaulted accounts that are in long term arrears.
Most creditors don’t want to deal these accounts so they pass them to collection agencies, who will collect the remaining debt back.
Collection agencies are companies that specialise in buying and collecting debts. They will either buy the debt from the original creditor or the original creditor pays them a percentage of the amount they collect.
Once a debt passes to a collection agency you pay them directly and in most cases, the agency will stop interest and charges, but there’s no guarantee that they will.
You can still arrange a reduced payment with a debt collection agency.
Debt collection agencies aren’t bailiffs and they don’t have any more legal powers than the original creditor.
They can contact you by letter or phone and they might call at your home, but this is rare. Debt collection agencies still have to follow Office of Fair Trading (OFT) guidelines on fair debt collection.
If you’ve been contacted by a debt collection agency or you’re having problems with your creditors, call our Helpline on 0800 138 1111 for free debt advice or use our online Debt Remedy tool. In just a short space of time we can give you tailored advice on the options you have, and what we can do to help your situation.