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Information on how accounts are transfered to 3rd party collecti

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Mark Cappel
UpdatedDec 1, 2022
What can you do when you call a original creditor and they transfer you to a third party?

Hello, I was wondering if you had ever heard of a collection agency using their address but saying they are capital one. Basically putting capital one bank with an address that came back when I googled Trakamerica, a collection agency in New York. What can you do when you call a original creditor and they transfer you to a third party? And so far found no way to talk to the OC and they still own it I guess because on credit report it is updated monthly even the charge off status.

Your original creditor has every right to transfer your account to a collection agency to attempt to collect on the debt if the account goes into default. In addition, the creditor is within its rights to transfer you to the collection agency when you call the original creditor to discuss the account. In fact, when accounts are assigned to collection agencies, it is standard practice for the creditor to insist that you speak with the collection agency to work out a repayment arrangement or settlement.

As for the collection agency representing itself to be Capital One, this may or may not be proper, depending on the collection agency's relationship with Capital One. Many creditors own their own collections divisions, in which case the collector can collect in the name of the original creditor. However, third party collection firms are generally required to disclose their name and the fact that they are not directly affiliated with the creditor, if the consumer asks for this information. Many third party collectors will state "I am calling on behalf of Capital One." Such a statement, while potentially misleading, is allowed, as the collector is not claiming to be calling from Capital One, only on Capital One's behalf. I am not sure exactly what the collection agency told you when they called, but if they claimed to be calling from Capital One directly, they may be in violation of the federal Fair Debt Collections Practices Act. I encourage you to read more about this law by visiting the Federal Trade Commission website at Ftc.gov.

If you are struggling to repay your debts, I encourage you to explore the options available to you to help repay them, such as credit counseling, and debt negotiation. To learn more about these services and which may be able to assist you with your debt, I invite you to visit the Bills.com Debt Help page.

I wish you the best of luck in resolving your debt problems, and hope that the information I have provided helps you Find. Learn. Save.

Best,

Bill

www.Bills.com

Dealing with debt

If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q2 2022 was $16.15 trillion. Student loan debt was $1.59 trillion and credit card debt was $0.89 trillion.

According to data gathered by Urban.org from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 8% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

Each state has its rate of delinquency and share of debts in collections. For example, in New Hampshire credit card delinquency rate was 2%, and the median credit card debt was $471.

To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.

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2 Comments

BBill, Sep, 2009
You could be sued by the creditor, which in your case would be the collection agency that purchased your debt from the original creditor. If a lawsuit is filed against you and you do nothing, you will have a judgment against you, which gives the collection agency the right to garnish your wages, levy your bank accounts, or seize your assets. See Collections Agencies, Collections Laws and Your State's Statute of Limitations for more information.
GGayla Naldrett, Sep, 2009
This article was very helpfull, but I have another question that I am hoping for answers. The question that I want to know the answer to is that what if a debt does go to collections, and the consumer does not cooperate to resolve the debt, at the 3rd party level, then what happens next?