Should I Be Using A Head-Hunter For CFO Recruitment In London?
Arnab Dey, 4 days ago
No one wants to receive a phone call from a debt collector. But for many creditors, debt collectors play a crucial role in helping them recover payment from multiple delinquent accounts. Creditors often get a bad reputation because they use the services of debt collectors. It is essential to understand that these creditors are only acting within the bounds of the debt recovery guidelines.
A debt collection agency is categorized as an institution that UK law gives license to collect outstanding debt and past-due receivables on behalf of its clients. These institutions can limit their operation to a defined territory, but some operate on a national or international level.
Many companies around the UK hire the services of a debt recovery agency because maintaining an in-house collection department can be quite costly. A third-party collections agency saves not only money, but also time and resources that a company will need to spend to contact the debtor, arrange visits, legal fees, and hiring bailiffs.
Therefore, it makes more sense for the creditor to turn over the task to a professional debt collection agency so that they can focus on more critical operational aspects of running the business. Another reason why creditors hire collection agencies is that they could potentially earn money for every debt that is already written off as a loss.
Contrary to the impression of many people, the actions of debt collection agencies are strictly regulated by the UK government. Any activity that is considered a breach of regulations may result in litigation. In general, the following are specific actions that are considered legal as a debt collection agency attempts to collect payment from debtors:
In addition, the following institutions regulate debt collection agencies: Credit Services Association, Consumer Credit Act, the Limitation Act of 1980, and many others.
Debt collection agencies in the UK are generally categorized as:
A first-party debt collection agency is part of the creditor’s company, while a third-party debt collection agency is an independent institution duly licensed and registered by the UK government. On the other hand, a debt buyer is an institution that purchases delinquent or default accounts from the original creditor at a fraction of the initial value. Through the purchase process, they become the legal owners of the debt wherein UK laws afford them the authority to recover the payments independently.