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A collections specialist is an employee of a debt collections firm who contacts borrowers that have defaulted on debts, or people who have failed to settle past due bills. Specialists must first locate debtors and then attempt to collect payment by negotiating debt settlements. Typically, a collections specialist receives a base salary but some firms pay bonuses to employee's who manage to collect past due debts.
Many collections specialists have a background in lending or banking. Some collections agencies require specialists to have college degrees in finance or economics. Other firms prefer to hire people with a background in sales who are used to making proactive tele-consulting calls.
In many nations, details of credit accounts are maintained by consumer credit reporting agencies and lenders obtain reports from these agencies before extending new credit to consumers. A collections specialist must have a good understanding of consumer credit reports. Many borrowers agree to settle delinquent debts when they are made aware of the damage the debt has done to their credit report.
A departmental manager assigns a number of past due accounts to each collections specialist, who attempts to contact the debtor by using the contact information that the lender provides. In many instances, the phone numbers or addresses provided prove to be inaccurate, but laws in some countries enable collections firms to contact relatives of the debtor in order to obtain the correct contact information. If the collection specialists cannot locate the debtor, the agency normally refers the matter back to the lender. In some instances, rather than helping lenders to collect debts the collection agencies actually buy the debts from the lenders. Specialists often spend more time researching debts that have been bought as opposed to debts that are still owned by other parties.
Many nations have laws in place that limit the ability of collections agents to harass debtors. In some areas, a collection agent cannot contact a debtor by phone during certain hours such as early in the morning or late at night. Typically, laws also prevent a collections specialist from making false or misleading statements about the consequences the debtor may face for failing to settle the account. Consequently, specialists must familiarize themselves with national and regional debt collection laws because in some countries specialists and agencies can face fines for violating such laws.
Laws in some nations enable collections firms to begin legal action against debtors who prove unwilling or unable to settle their debts. A collections specialist normally has to notify the debtor in writing about the impending court action and may also have to file papers at court. In many instances, agencies can garnish the debtor’s wages or even place a lien on the debtor's house. A lawyer normally handles the court case but the specialist who attempted to collect the past due debt may have to appear as a witness in court.
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