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Debt Collection Agencies (DCAs) - Coggle Diagram
Debt Collection Agencies (DCAs)
What is a Debt Collection Agency (DCA) and what powers do they have?
They don't have any special powers. They have the same powers as the original creditor.
They have the right to contact customer by phone, post and in person.
They have the right to update Credit Reference Agencies.
They have the right to take legal action.
What common concerns might a client have and why?
They could think it a letter from a DCA is from the court or a bailiff because of the way the letter is worded or appears.
They may be worried that a bailiff will turn up on the doorstep, gain access and take their possessions.
They may think that it might not be real or could be a scam.
It could be a really old debt that client doesn't recognise. They might think that it's an extra, new debt.
They might think that extra charges & interest will be applied.
They might start thinking that they should be treating the debt as a priority.
How does a debt end up with a DCA and how likely is it that the debt will end up in court?
The customer may have fallen behind with the debt and defaulted.
The creditor can sell the debt to the 3rd party (DCA). A notice of assignment is sent to customer advising the legal ownership has been transferred to them.
The creditor can ask a 3rd party (DCA) to collect payments on their behalf. In this case, the debt would still be owned by the original creditor.
Not likely to end up in court at all but depends on many factors including:
A fee would be payable so is it worth the DCA pursuing?
If communication has been good with the debtor, it is not likely to happen.
If there have been previous broken arrangements it is more likely.
It does depend upon the creditor and if they tend to go for legal action for security.
What is the difference between a DCA and a bailiff?
Debt Collection Agency is known as a 3rd party company.
A DCA has no legal right to force entry properties or remove goods.
A DCA can attend a property and be invited in, but have no legal right to remove property to pay for debts.
A bailiff can be called after court action.
A bailiff can't enter by force only peaceful entry (unless high court enforcement).
A bailiff has the right to control goods and remove them if peaceful entry has been made.
A bailiff can sell goods at auction to offset the debt.
Bailiffs have the right to remove good from outside the properties providing they're not on HP.