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Debt Collection Agencies - how do they work?

  • 10-05-2008 12:26pm
    #1
    axer
    Registered Users, Registered Users 2 Posts: 5,517 ✭✭✭


    Hi all,

    Just wondering what is the law on the use of these. Came across posts of people getting letters etc.

    1. What happens if the debt is passed to a debt collection agency and the person who owes the money pays who they originally owed the money to e.g. by bank transfer or whatever? i.e. can the debt collection agency actually be ignored or do they have legal entitlement to the money or what?
    2. How is the debt actually passed to the collection agency i.e. is it via contract law or via an actual statuate law or usually by the t&c of the original agreement?

    Thanks.


Comments

  • #2
    Our man in Havana
    Closed Accounts Posts: 29,473 ✭✭✭✭Our man in Havana


    The Debt Collection Agencies work on commission of anything up to 10% of the amount owed. So say a DCA collects €1000 for a business the business only gets €900. If you pay the business direct the DCA won't get its commission.

    In that situation the DCA can be safely ignored.


  • #3
    axer
    Registered Users, Registered Users 2 Posts: 5,517 ✭✭✭axer


    Bond-007 wrote: »
    The Debt Collection Agencies work on commission of anything up to 10% of the amount owed. So say a DCA collects €1000 for a business the business only gets €900. If you pay the business direct the DCA won't get its commission.

    In that situation the DCA can be safely ignored.
    Thanks Bond-007

    I have also seen cases where the debt collection agency use a solicitor and ask that the monies be paid via the solicitor - can the person who owes the money still pay direct to the company/person they owe it to?

    Is a debt collection agency different to those agencies that buy the debt and does the same still apply then i.e. can the person who owes the money still pay the debt direct to whom they originally owed it to? or is that a different legally situation?


  • #4
    Our man in Havana
    Closed Accounts Posts: 29,473 ✭✭✭✭Our man in Havana


    I have also seen cases where the debt collection agency use a solicitor and ask that the monies be paid via the solicitor - can the person who owes the money still pay direct to the company/person they owe it to?
    Of course. But someone won't get their commission.
    Is a debt collection agency different to those agencies that buy the debt and does the same still apply then i.e. can the person who owes the money still pay the debt direct to whom they originally owed it to? or is that a different legally situation?
    I don't think much debt selling goes on in Ireland. I would imagine if a debt is sold the new owner would have to tell you that they now own the debt. In that case I would imagine that you would have to pay them in that situation.


  • #5
    dermot_sheehan
    Closed Accounts Posts: 2,062 ✭✭✭dermot_sheehan


    Debt collection agencies work as you agree in the contract with the person you incur a debt with that they may assign their interest in the debt to another party.


  • #6
    axer
    Registered Users, Registered Users 2 Posts: 5,517 ✭✭✭axer


    In the case of a debt collection agency - could the person/company who the debt is owed to legally refuse to accept payment of the debt to force the debtor to go through the debt collection agency?


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  • #7
    Our man in Havana
    Closed Accounts Posts: 29,473 ✭✭✭✭Our man in Havana


    I doubt it.


  • #8
    Gobán Saor
    Closed Accounts Posts: 415 ✭✭Gobán Saor


    axer wrote: »
    In the case of a debt collection agency - could the person/company who the debt is owed to legally refuse to accept payment of the debt to force the debtor to go through the debt collection agency?
    If the original contract giving rise to the debt allowed for the assignment of the debt to a third party, yes; otherwise no.


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