Collection Agency – Who They Are And How They Work
The long and short of it is that a collection agency is a go between. A lot of businesses and lending institutions use these agencies to collect on past due accounts. Large businesses and corporations, like banks, generally have an entire department devoted to collections. Smaller businesses that cannot afford to dedicate resources to this hire out or sell out right the delinquent accounts. 

A collection agency charges a fee, which is usually between 20-35% of the bill, for their time and effort. The businesses feel that recovering some of the funds is better than not getting anything at all. This percentage of the bill is the reason a lot of people who work for collection agencies are so aggressive. They get a portion of everything they manage to collect. This is the incentive to lead to a lot of the harassment tactics so common today.

There are laws that protect you, under the Fair Credit Reporting Act and the Fair Debt Collections Practices Act. If you are being harassed by a collection agency you need to familiarize yourself with these two statutes. Many of their methods are in direct violation of the laws but because consumers are unaware of them they get away with it. You can find both of them online and explained in various articles around the web.

One of the laws that are broken continuously is the calling times. They are not to call before a certain time in the morning and after a certain time at night. But this doesn’t stop the 6am phone calls or the 3am harassment.  The collection agency is not supposed to call you at work. If you tell them to stop after that first phone call and they persist then they are in violation.

A tactic they like to use is to tell you that they are going to garnish your wages or a bank levy. This is not something they can legally do unless the original creditor had a judgment against you. And in some states even this is not enough to let them proceed with this process.  They also have been known to say you could be arrested. This is a complete fallacy or the jails would be full of debt holders and not real criminals.

Calling family and friends is also on the lists of don’ts. It is all in how they approach the phone call they can try to get physical address on you but they cannot discuss the reason for the call. It is against the law for them to inform others of your financial affairs.

It is really up to you to learn what a collection agency is and how they work and the first step in allo of this is getting to know your rights as a consumer.