The Relationship Between Credit Unions And Debt Collection Agencies
In order to understand the relationship between credit unions and a debt collection agency and their contributions to the whole deb collection agency, first, we need to understand the basics and their roles. Credit unions are the parent or the backbone of many services across the world, offering their members everything from student loans to auto loans to mortgages and just about every other money/assets lending service in the middle. However, not every user/member is as diligent about paying back the required loan payments as agreed. The world collection systems have the in-house experience and talent needed to improve both lending and debt collection solutions for all credit unions, thus reducing overall costs of loan collections, meeting users where they are at and renegotiating the outstanding debts. On the other hand, debt collectors or debt collection agencies often work for a debt union, though some operate as a single unit as intermediaries collecting clients' delinquent debts.
Read more about debt collection agency
How do Credit Union and Debt Collection Services work?
Collection services tend to major and specialize in the kinds of debt they tend to collect. For instance, an agency might collect any form of delinquent debts of at least $1000 and less than four years old. A known and reputable agency will also have some limits on its operation when it comes to collecting debt within its statute limitation, which can vary from one state to the other. And being within its operations which is always limited by the Statute of Limitations, means that all the debt is still valid, and a creditor can still pursue the same legally. The creditor pays the service collector the agreed percentage, normally between 20% to 40% of the amount recovered. Debt agencies collect different delinquents, which range from credit cards to debts to medical, to automobile leans, to business, just to mention a few. However, some research shows that debt collectors have a negative reputation for harassing clients. The FTC or the Federal Trade Commission receives more customer complaints about several collectors and debt buyers than any other service. The FDCPA or the Fair Debt Collection Practices Regulation Act limits how collection agencies can recover any form of debt to keep them from using any abusive, deceptive and unfair methods to both unions and collectors. So, if you happen to be confronted by a debt collector, be sure that there is an act that defends your interest and rights.
Relationship between Credit Unions and Debt Recovery Specialists
Lower loans or auto loans, high savings on both compound and simple interests, financial education loans are some of the added benefits one enjoys being a member of a credit union, but these sums are expected to be repaid, and the key relationship between the credit union and debt union is that credit union that is the lender hires a debt recovery agency which acts as a middleman to collect the loans that are in case you fail to pay the agreed sums in the agreed period. In conclusion, the credit union is the key reason for the survival of credit collection agencies because we need a lender in the first place to have a loan for the collectors to recover.