The professional finance company is a debt collecting agency. Such agencies are employed by lenders and creditors to recover their funds, all the past dues. They usually recover funds from the accounts which have defaulted or on the verge of defaulting.
Now the question arises why a creditor would hire a debt collecting agency because the lenders whether it is a bank or any other financial institution. They have their infrastructure, a workforce to do the collection work. They have their call centres, executives reaching out to the customers. But the job debt collector comes into the picture when lenders fail to collect their receivables despite multiple attempts. In such circumstances, the lenders left with nothing but to hire a debt collecting agency. The professional financial consultant is one such which carries out the collection for lenders and creditors.
When does a professional finance company report to the bureaus?
It is not the prerogative of a professional finance company or any other debt collecting agency to report to the bureaus. It will always be the lender who will report to the credit rating bureaus. Whenever a borrower defaults or fails to pay the debts on scheduled times, the creditors report to the bureaus.
If you extrapolate this fact, It is clear when the debt is transferred to a company like a professional finance company; the credit rating of the borrower is already affected. Most of the lenders keep this as a last resort. They usually have a buffer time of at least three to six months before they ask a debt collecting agency to do the job.
Is Professional Finance Company A Real Company, Or A Scam?
The professional finance company is a debt collecting agency which is a real company. It’s been quite a substantial time since they have been in the business. The company was founded in 1985 in Colorado. Now it has shifted its operation and headquarters to Greeley. They operate like any other debt collecting agency.
How do debt collecting agencies work?
The name is more or less self-explanatory. They partner with creditors and lenders, find people who have not paid their dues or defaulted on their loans. All the lending institutions do hire companies as the likes of the professional finance company. Even if you miss the payment of your postpaid cell service, you might hear from a debt collecting agency demanding money. They will usually call you several times, persuade you to pay. They will use all the sources of communication starting from texts, emails and calls.
Debt collection is a massive industry with thousands of workers working with who continuously in the business of chasing down people, who for some reason have fallen behind, and could not pay their dues on time. In the United States of America, every third adult has credit files which have debt in collection.
The business model of debt collecting agencies is pretty simple. They get the share of the amount they collect from the individuals and organisations defaulting on their debt. They generate massive revenues, the incentives are huge. Their methods have been in question from quite a while. They use all the persuasion tools to make the end customer pay their debts. Most of the companies, likes of professional finance company operate under the legal umbrella of the state.
Debt collecting agencies like professional finance company do their business in other capacities. Apart from acting as an agent of the lender, they also purchase the debt creditors. Once they buy the debt, they get the ownership and they can collect the whole amount from the borrower.
They go for this option, when they see a promise, that borrower is willing and can pay their dues. They offer various incentives to the borrower to pay out their debt accounts. Creditors also sell their debts, when they don’t see much promise or profit in keeping those accounts. So, it’s a mostly a win-win situation for all the stakeholders.
Should I Negotiate A Settlement Or Pay Professional Finance Company?
Even if you pay in full, your credit ratings will be affected. But you should not let the company exploit you anyway. Sometimes, these debt collecting agencies use very crude methods to recover funds. There are laws to protect you. If the company has purchased the debt from your original creditor, then you should go on negotiating table. And try to get done with settlement as soon as possible. Even if the debt is with the original creditor you should still find ways to settlement.
Also, you need to be very careful dealing with collecting agencies, whether it’s a professional finance company or any other company. There are so many fault lines that you need to be aware of. At times, you don’t even know if you are interacting with a real debt collecting agency that your original creditor has hired or just a decoy. If you are dealing with bad debt or any debt collecting agency, you should be in acquaintance with all the fault lines related to this business. It will not only help you manage your debt better but also you will be better placed to deal with these agencies.
The usual progression
To start with you are answerable to none but your creditor. Usually, the creditor will contact you for about six-month post your bill overdue. The lending has a dedicated cell which deals with borrowers who are falling short on their debt. If you do not settle your dues in this buffer period. The creditor might be forced to transfer your debt to a third party debt collection agency like a professional finance company. It’s always reasonable to get done with the settlement before your debt gets transferred to a third party debt collecting agency. But at times circumstances do not allow you to do the same. If your creditor sells your debt to a third party debt collecting agency, then you owe the collecting agency. The original creditor will have no role to play in this.
Once your money to a debt collector agency, it will make things more difficult. Because so many other laws related to third party debt collection come into the scene. The debt collecting companies like professional finance company will always be more aggressive than conventional bankers. They at times even adopt unlawful practices, which you need to be very cautious of; if you are dealing with third party debt collecting company. That’s the reason finance professionals always advise to settle the debts before they go into the hands of a third party Collection Company.
There are many other grey areas as well, that you need to be aware of. As it’s been observed that many debt collecting companies like professional finance company resort to unlawful practises, so it becomes essential to verify everything once a debt collecting company contacts you. If the company showing you a bill, which you think is not in line with actual. You can go ahead with debt collection arbitration.
In normal progression, the debt collection company should contact you within the first five days of debt transfer. It’s the prerogative of the company to inform you of everything in writing. The notice must have mentioned the name of the borrower, and the amount she owes.
The road to arbitration
There are instances when debt collection companies like professional finance company keep calling, emailing individuals even if they settled all their dues concerning the third party company. At times, they add unlawful surcharges, and they keep demanding that. This could be a very frustrating experience for the borrower. All of this could only be settled, once you an independent arbitrator into the picture. You have no other option but to go with a third-party arbitrator.
To stand for yourself, you need to produce concrete evidence. Always assume that the company will also be ready with its claims. If they don’t have odds favouring them, they will not waste their time. So, you need something substantial evidence to defend your case. Collect all the documents, receipts, and account summaries as much as possible in your capacity. This will only strengthen your case.
After hearing arguments of both parties, the arbitrator shall decide the future course of action. The decision can go either way, that’s why it is deemed mandatory to keep all the data and documentation safe at your disposal when you are dealing with a debt collecting company.
The debt garnishment is an eventuality that you need to be aware of. If you have not paid off your debt for a significant amount of time, post the due date decided by debt collecting company. The collecting agency can request the for a garnishment order. A garnishment order can affect your financial health significantly. With the garnishment order in place, the company can collect the owed money directly from your other sources of income or fixed assets which yield regular income for you. They can even garnish money from wages, pensions and bonuses. This will mean, a big part of your current earnings will go into paying off your past debt. You will have to pay this until the full amount is satisfied.
There are some constraints on creditors, even if they manage to get a garnishment order from the court. The creditor will have to make sure that you are left with enough to pay out basic expenses.
Learn your rights
As mentioned above, collection agencies like professional finance company resort to many aggressive tactics for the collection process. Any type of harassment in name of collection tactic is grossly unlawful and unjustified. There are laws related to it in every state, and most of the laws intersect and do not allow any of the tactics which can lead to the harassment of the consumer. You need to know and recognise the law of your state and call out when needed.
FDC Practises Act
The national Federal Trade Commission has a very well articulated act called the Fair Debt Collection Act, which bars all the debt collectors like professional finance company to use any unfair practices. The use profanities or any abusive language for that matter, unfair and deceptive tactics are completely prohibited.
The cat is very comprehensive; the act covers personal, household, family debts. Even car loans, Credit cards and mortgages are covered in this act.
The law strictly prohibits the following:
- Harassment of the borrowers by means and tactics
- Deceptive and false statements
- Unfair actions
The law gives you the absolute right to privacy. So, when the collecting agency like professional finance company calls you for the very first time, you can clearly state that you want all the future communications in writing. The debt collecting agency cannot forcefully call you. The person reserves the right to be the only person accountable for the debt. So, you can ask the collecting, you will be the only point of contact regarding the collection of the debt. The law gives absolute immunity to the borrowers to protect their privacy. Any attempt by the collecting agency to breach your privacy will be unlawful and you can always hold the company accountable in the consumer court.
The bottom line is if possible individuals should manage their debts carefully. And even they fall short, they should find a way for settlement before the debt get sold or transferred to any third party collecting agency. Things can be managed very smoothly with banks and financial institutions, which are in the conventional lending business. They are always respectful, and they will you in all the possible ways.
Also, there is a parallel reality that you don’t get to choose your circumstances. If your debt gets sold to any third party debt collection agency, be it a professional finance company or any other company. You should aware of your rights, and the way ahead. The clarity about how you want to go about the business helps big way in managing past debts. Because you get that much-desired leg room to plan strategically without affecting your present endeavours.