Differentiating Debt Collectors, Debt Buyers and Original Creditors

For many people who are on the receiving end of collection calls and letters, it’s hard to determine whether or not they are dealing with debt collectors, debt buyers or original creditors. Know that each one have different motivation and depending on how you deal with each, settlement may come out differently as well. In this article, we will discuss more about debt collectors, debt buyers, and original creditors.

Original Creditor

As the name suggest, an original creditor is where you incurred the debt. For instance, if you have an outstanding hospital bill, the original creditor is the hospital. If you bought a pair of shoes using a credit card, the creditor would be the shoe store. If you received a collection call from the original creditor, you are likely speaking with someone who is working for that company called an in-house debt collector.

Debt Collector Agency

If the original creditor was not able to collect the money, they will outsource the collection efforts from an agency. A third party debt collector will do all the collecting themselves and in some cases, even apply unsavory collection tactics in order to get what they want. Some debt collectors are open for negotiations and will accept repayment in a lower lump sum or other repayment plans in a bit to maintain great business relationship with the original creditor.

Debt Buyer

Debt buyers are agencies which purchase old, charged off, uncollectible debts that neither the original creditor nor the debt collector company could collect from. Buying and selling debts is a billion dollar industry and debt buyers make profits off people’s outstanding debts. Debt buyers, also known as junk debt buyers, are often painted as the most abusive in terms of debt collection among the three. They are known to habitually break consumer rights law just to extract money from delinquent debtors.

Under the law, debt collectors, junk debt buyers and original creditors should treat debtors with respect and dignity. If you were harassed or threatened by any of these collectors, you can file a complaint. Collection agencies and junk buyers are subject to the federal Fair Debt Collection Practices Act while original creditors have their own fair debt collection practices that are similar to federal law. The important thing to remember is to know more about consumer rights law and how to properly file a complaint should you be a victim of unfair debt collection tactics.


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