Welcome back to debt collection 101, your beginners guide to debt collection. In article two of this series, I wrote about what a debt collector will do after they have located their debtor and informed them of their debt. Many times collection agents can make it easier for debtors to pay back their delinquent accounts, can be friendly and offer advice, but also have the ability to mark your credit score negatively, and hand your account over to an attorney if you refuse to pay.

In article one, I wrote about the two different types of debt collectors, in house collectors, and third party collectors. In house collectors are bill collectors that work directly under the creditor, and these creditors are generally financially based businesses like mortgage or credit card companies. Third party collection agents make up the majority of debt collectors and work directly for a third party collection agency that is hired by a creditor to collect on their delinquent accounts.

Because in house collectors directly represent the creditors, they are not bound by many of the rules and provisions of the Fair Debt Collection Practices Act (FDCPA). However, third party debt collectors are, and there are a number of rules and regulations that they are bound by.

In addition to the Federal regulations third party debt collectors must follow, they must also be careful to abide by the state procedures that apply as well. Debt collecting is closely monitored because of the fact that people’s financial issues have the ability to be a sensitive issue. According to the Federal Trade Commission, a collection agent has to positively verify that they are speaking with the debtor themselves, and not anyone else before they can proceed with the phone call.

After they have positively identified the debtor, the debt collector will issue a statement, known as a “mini-Miranda” which lets the consumer know that this phone call is an attempt to collect debt, and any information in the conversation can be utilized to do so. The numbers of regulations and rules for a collection agent who is calling cross country can be overwhelming. A number of companies use electronic systems now to help debt collectors keep track of all of the rules regarding each call. To be continued in parts 4, 5, and 6.

Mallory Megan works for Rapid Recovery Solution and writes articles about medical collection agencies. Unique version for reprint here: Collection Agencies For Beginners: Rules And Regulations.

Looks like another library is getting tough with customers. In a localized area of Australia, nearly $30,000 worth of books, DVDs, CDs and magazines are outstanding things at libraries.

Shockingly, one borrower owed almost $2500. After you are done scratching your head and wondering why the patron didn’t just buy new books from a store, allow me to bring to your attention that more than 930 items worth $11,467 still need to be returned to the Aussi Town Campbelltown’s libraries at Campelltown and Athelstone.

It doesn’t end there; the Norwood, Payneham and St Peters libraries have 659 outstanding loans worth almost $17,951. Interesting fun facts include the fact that one of the clientele owes $2438 in overdue fees and replacement costs, and the most overdue item at the Campbelltown library dates back to another era- April 21, 2006.

Library services manager Suzanne Kennedy pleaded with the public to return the books.

“When borrowers don’t return media items, or hold them for far longer than the normal lending period, they are preventing other fellow borrowers from enjoying those resources.” Ouch. Some pretty brutal words there. Kennedy continues: “Ultimately, for each item not returned or replacement costs received, the council has to replace, meaning that it cannot purchase additional items in its collection.”

Adding to the severity of the situation is the fact that the number of residents using the libraries was rising, making it even more important for the books to be returned on time. Local libraries charge two dollars for each late notice with replacement costs if the item can’t be found. When a patron’s debt gets to about $100, they are passed on to a collection agency.

According to Campbelltown’s acting library services manager Tamara Williams, patrons paid when the agency became involved. For now, it is the best the libraries can do to get their fine money…that is until they can hire some more threatening looking dweebs to work the desks.

Mallory Megan works for Rapid Recovery Solution and writes articles on commercial collection agencies.

Your credit score. It could be your worst nightmare, or a dream come true. But most of the time it’s kind of like that nosy mother in law coming to stay at your house for a few days. You know that she is coming to stay, and you are not looking forward to it, but you are too nervous to ask or even consider how long she might be paying you that visit. OK, so that analogy wasn’t that great. But anyway, read on to see just how long negative marks will stay on your credit history.

First, there are errors on your credit score. This occurs when something that you did not do, or an account that does not belong to you shows up on your score when you review it. These will be removed immediately. Finding and removing mistakes on your credit report are an important reason why we should check our credit scores at least once a year. If you do locate a mistake, or a negative account that isn’t yours, get in touch with the credit reporting agency and the creditor too. Within 180 days you should be able to have that negative mark taken off your record.

Anytime a creditor asks to see your credit report (pulls your credit report), something called a hard inquiry will be recorded on your credit score. If these hard inquiries are only occasional this probably won’t hurt. However, if there are a large amount of inquiries recorded on your record, this will generally make prospective creditors think that you need the cash and you need it fast.

If a potential lender takes a look at your credit score and notices that they are the fifth creditor that you have asked for cash, they will have cause to be wary. Although the credit reporting gods will concede that people shop around for loans and credit, and say you have, two weeks where you have a lot of inquiries, they will take that into consideration and not penalize you too much, the bottom line is that the more hard inquiries that show up on your report, the lower your score will be. Hard inquiries last up to two years.

However, keep in mind that not all inquiries will negatively affect your credit score. A soft inquiry occurs when you check on your own credit score, or when potential creditors check your credit without you knowing to you to see if they want to make you any unsolicited offers of credit. Actually, lenders see this as a good sign. If you are regularly checking your credit report, you are most likely fiscally responsible. To be continued in part two….

Mallory Megan works for Rapid Recovery Solution and writes articles about medical collection agencies. Also published at How Long Will A Negative Mark Stay On Your Credit Score? Part One.