Frequently Asked Questions - Part 3

Commercial Investigations Inc. gets many questions about the business of collection agencies. For those interested, here are some of the most frequently asked questions about collection agencies that we hope will help you understand collection agencies and the process of debt collection.

These questions and answers are geared towards debtors themselves, generally after they have been contacted by a collection agency.

What do I do if I am contacted by a collection agency?
The best thing to do is to respond to the collection agency as soon as possible. Ignoring the debt can lead to even more difficult situations. If you believe the debt is not valid, you need to go through the proper procedures to let the collection agency know. Until you say something, they will continue to think the debt is valid! If you debt is valid, the best thing to do is to arrange a way to pay the bill in full or create a payment plan.

How can I find out what the bill is for?
The collection agency will provide information about the unpaid account they are contacting you about. They will let you know the amount owed, the name of the creditor, and what to do if you dispute the debt.

What if the debt is not valid?
If you have already paid off the debt or it does not belong to you, you must send the collection agency written explanation concerning your situation along with any support documentation that supports your claim. The collection agency will review this information and must send you any documentation they have that supports the validity of the debt. If the debt does not belong to you, you will have to write to them and explain the mistake. You may be asked to prove that it is not you, such as showing your driver’s license. If you are a victim of identity theft, there are many more steps that must be taken, such as contacting the credit bureaus and filing a police report.

Can a collection agency report the debt to a credit bureau?
Collection agencies do have the ability to report your debt to the credit bureaus. Most collection agencies will not report your debt immediately to the collection agencies. This gives you time to either dispute the debt or pay it off before it is marked on your credit record. Thus, it is even more important to handle the collection agency as soon as possible.

Can the collection agency remove a bad credit report after I pay off the debt?
A reported debt is not allowed to be deleted. The collection agency will show that the debt has been paid in full. Another reason why it is a good idea to handle the debt before the collection agency reports it.