DEFINITION of 'Debt Collector'

A company or agency that is in the business of recovering money that is owed on delinquent accounts. Many debt collectors are hired by companies to which money is owed by debtors, operating for a fee or for a percentage of the total amount collected. Some debt collectors are debt buyers; these companies purchase debt at a fraction of its face value and then attempt to recover the full amount of the debt.

BREAKING DOWN 'Debt Collector'

Debt collectors are monitored by the Federal Trade Commission (FTC), which enforces the Fair Debt Collection Practices Act (FDCPA). The FDCPA prohibits debt collectors from using abusive, unfair or deceptive practices during the debt collection process. For instance, debt collectors are not allowed to contact debtors before 8:00 AM or after 9:00 PM, nor can they falsely claim that a debtor will be arrested if he or she does not pay.

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RELATED FAQS
  1. Are debt collectors allowed to call me at work?

    Find out if and when it is all right for a debt collector to call a debtor at work and how the debtor can make it stop under ... Read Answer >>
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    Find out how a collection agency makes money, what rules it is bound by, and when it can take a pay check or garnish a bank ... Read Answer >>
  3. Can debt collectors add fees to my debt?

    Find out when a debt collector is legally allowed to charge interest and fees on a past-due debt and if a debtor can contest ... Read Answer >>
  4. What are my rights under the Fair Debt Collection Practices Act (FDCPA)?

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  5. Can a debt collector contact me about a debt that's no longer on my credit report?

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