Posts: 14,062
Registered: ‎04-15-2011
Re: Understanding agencies that buy your loans once defaulted

AndySoCal wrote:

Collection agency can get a debt to collect on in one of two  ways.  The original creditor can assign your account to a collection agency. The original creditor still owns the debt. The collection agency receives a fee for colleting on the account. The other method  is the original creditor sells the debt to collection agency at a discount.  A collection agency of this type is called a factoring company. In either case all the FCRA and Fair debt collection practices act still apply..

A collection agency is someone who buys debt for the purpose of collection.  By definition a factoring company buys accounts that are not in arrears in an effort to boost cash flow for the OC.  The whole factoring company thing is an exploit the CAs have found in the posting to the CRAs that enable them to bypass certain aspects of the CRAs and allows them to appear as the OC. They are not a factoring company, they are a collection agency.  We know it, they know it, and even the CRAs know it.

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