The Use of Debt Collection Systems for First and Third Party Agencies

Debt collection systems are used for streamlining collections for first and third party collection agencies. First party agencies are part of the same company as the creditor, and third party agencies are a separate entity obliged to adhere to FDCPA standards.

Businesses or organizations have procedures to retrieve uncollected funds from debtors for products and services already delivered. When a company has an in house department or subsidiary, it is considered a first party agency for collections. They are fundamentally the same company as the creditor. A third party agency is neither part of the creditor or debtor (second party) in the original transaction. Their services are typically sought after first party collections are unsuccessful.

Third party agencies must adhere to the Fair Debt Collections Practices Act (FDCPA) which protects the consumer from harassment. Among many restrictions, the FDCPA limits hours for phone contact, and limits communication from the agency if the debtor has sent written notification of their wishes not to be contacted. The Act also prohibits agents’ incessant calling with the intent to annoy or harass, and also forbids misrepresentation or deceit. There are other guidelines mandated by the FDCPA, but they only apply to third party agencies. First party agencies can adhere to these rules, but they are not obligatory.

Both types of collection agencies use debt collection systems to achieve their goals. Computer technology and debt collection systems are a necessity in the field for successful operations. Software used by first or third party agencies often works in a Windows environment allowing for an efficient collections process, as well as the ability to view information to keep track of collections.

Debt collection software systems benefit agencies by merging account information electronically and then coordinating calls, call history and follow ups, and tracking communications such as letters to debtors. Predictive dialer options are also a software feature which increases agent’s ability to speak to the correct person. First and third party agencies are aided in their goal of collecting delinquent funds with the use of debt collection systems.