A collection agency is the intermediary between a lender and a borrower when the loan is not repaid. Generally, this type of agency is a company, a financial institution or a business, mandated by a creditor in order to recover a sum of money that is due to him.
In a non-refundable personal payday loan, it is often common for the company that owes money to use this type of recovery service to manage the file.
Why is it better not to deal with a collection agency?
Generally, if you are applying for a loan you are not planning to be faced with a collection agency in the future since this would mean that you have not been able to repay the loan.
However, you never know what can happen, because managing your personal finances is not always easy and the accumulation of debt sometimes happens without warning or much faster than expected.
If you are in this case, be aware that the debt collector will contact you in writing. He can not call you directly, but if he does not have your contact information he can always join you at your job or ask your friends or even your employer.
The collection agency does not have all the rights
It is important to know that a collection agency does not have all the rights and that it must imperatively hold a license. The first contact can be established only by mail and thereafter the agent is authorized to join you only from Monday to Saturday, between 8am and 8pm, by presenting each time. You can also ask him to contact you only in writing.
Aside from joining the first time, the agent does not have the right to contact your employer or your entourage, or to disclose your financial difficulties. Of course, he has no right to ask you for more than your debt or to threaten you with arrest or criminal prosecution.
If you ever believe that he is violating any of the rules to which he is subject, contact the Office of Consumer Protection directly.
How to react when dealing with a collection agency for a non-refundable personal payday loan?
If a collection agent comes in contact with you, do not panic. First, check its legitimacy and go to the government website to verify its authenticity with the regional office of the Office.
Find out exactly who you have on the phone, what business they work for, how much debt they owe, and who owes you money. Check that it is your debt and then contact the person again.
If it is your debt and you are able to repay it then, do it as soon as possible. If you can not afford it, be honest with the collection agency, and show them your good faith by offering other repayment alternatives such as multiple payments or a first payment.
Never send cash and be sure to always get a receipt once payment is made. From the moment you contacted a collection service also know that you no longer have to trade with the original creditor.
An error has been made: you have no outstanding loan
If after studying your accounts you realize that no debt matches what the debt collector wants, then act quickly to avoid negatively affecting your credit rating.
Then order a copy of your credit file at no charge and prove to the original creditor and collection agency that you do not own such a debt.
Always keep in mind that you have rights when you are contacted by a collection agency for a non-repayable loan and you must act in the best way and as quickly as possible.