collection agency
A collection agency is any person or company , often hired by creditors , to collect or attempt to collect debts due or asserted to be due to another person or entity.
Some states, like Illinois , define a collection agency as “any person who, in the ordinary course of business, regularly, on behalf of himself or herself or others, engages in the collection of a debt.” Other states, like North Carolina , do not explicitly provide that a person collecting debt on behalf of himself or herself is a collection agency. However, many states explicitly exclude certain persons from the definition of a “collection agency.” Such common exclusions are, banks , trust companies , licensed attorneys , insurance companies, etc.
The Fair Debt Collection Practices Act (FDCPA) regulates what collection agencies can and cannot do. According to 15 U.S.C. § 1692e , debt collectors “may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt .” 15 U.S.C. § 1692c (a) only allows collection agencies to communicate with consumers between 8AM and 9PM local time. 15 U.S.C. § 1692b(6) prohibits collection agencies from communicating with a consumer directly if they know that an attorney represents the consumer.
[Last reviewed in January of 2025 by the Wex Definitions Team ]
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