What happens if i pay the original creditor instead collection

I'm in a vulnerable situation - should I let the collection agency know?

Dealing with creditors can be even more difficult if you’re in a vulnerable situation. Vulnerability can range from dealing with the loss of a loved one to chronic mental or physical health problems.

There are other vulnerabilities you may be dealing with, such as feeling anxious about speaking over the phone, or living with a learning difficulty.

It's important to let your creditors know if you're in a vulnerable situation. Once they’re aware of any difficulties you’re experiencing, they can offer you more support if you need it.

Will a collection agency add more interest and charges?

If the debt has been sold to a collection agency interest and charges will usually stop. The original creditor may already have stopped these after the account defaulted.

However, in some cases a debt collection agency may continue adding interest and charges. They can only add amounts which are allowed in the contract you signed with the original creditor.

If the debt is still owned by the original creditor they may continue adding interest and charges while the collection agency is contacting you.

I’ve got more than one collection agency contacting me about the same debt – which one do I pay?

Only one company should contact you about a debt. If you’re being contacted by more than one debt collection agency at the same time it’s best to contact the original creditor to explain what’s happening. They should tell you which company is dealing with your debt and stop the other company contacting you.

Some debt collection agencies use more than one trading name. This means it can look like you’re being contacted by more than one company, but it’s actually the same company using different names. Check the addresses on letters – if they’re the same or very close, you’re probably dealing with the same company. Using several names is confusing and you could ask the collection agency to contact you using one trading name only.

A collection agency is contacting me about a debt that isn’t mine

This is rare, but sometimes happens if a collection agency is trying to trace someone with a similar name to yours. Read our advice on what to do if you're being chased for a debt not in your name.

How do I know the debt collection agency is real?

Most debt collection agencies in the UK are regulated by the Financial Conduct Authority (FCA) and hold a valid consumer credit licence. You can contact the FCA to check if a collection agency is licensed or check the FCA register.

Most collection agencies are also members of trade bodies such as the Credit Services Association. If their letter shows the logo of a trade body, you can also contact them to confirm they’re real.

You can also contact us if you’re unsure. We deal with all major UK debt collection agencies and we can tell you if a company is legitimate.

If you neglected to pay a bill for a significant amount of time, don’t be surprised if you receive a bill from a new creditor. Your original creditor likely turned your delinquent account over to a collection agency. If you planned to pay the bill, naturally you may try to remit payment to the original creditor. Not so fast. By paying the original creditor before doing a little investigation, you could end up still owing the collection agency.

TL;DR (Too Long; Didn't Read)

If you pay the original creditor and not the current collection agency, you may still owe the money to the collection agency.

In-House or Independent Debt Collector

If you receive a bill from a collection agency, contact the original creditor. Some businesses have in-house collection divisions, while others send unpaid accounts to collection agencies. You need to determine which of these circumstances applies to the original creditor. If your original creditor has an in-house collection division, you can settle your account by paying the original creditor.

Contractual Obligations

When you received goods or services from a business in exchange for the promise to pay for those goods or services, you created a legally binding contract. Under certain circumstances, a party to a contract can assign the rights or benefits of a contract to another person or entity. This often happens when an original creditor sends your past-due account to a collection agency.

Take this example: You received services from the hospital and signed a contract saying you would pay the hospital. The hospital sent you a bill for $1,000 that you never paid. In an effort to recoup at least some payment, the hospital assigns the bill to a separate collection agency. Now, the collection agency has the right to collect from you.

Debt to Collection Agency

Let’s go back to the hospital example. You receive a bill from the collection agency that originated at the hospital. Therefore, you have received notice that the hospital assigned or sold the account. That means you have a legal obligation to pay the collection agency, not the hospital.

If you pay the hospital $1,000 for the debt, you will still have a legal obligation to pay the collection agency. If you’re lucky, the hospital will send your payment to the collection agency. You should not bet on that happening. The original creditor could keep the money you owe and not inform the collection agency of anything. That will result in a collection agency trying to collect the money for a bill you already paid.

The collection agency can legally report this debt to the credit bureaus. This could hamper your attempts to obtain credit, to buy a new car or even save for the future.

Fair Debt Collection Practices Act

Collection agencies must comply with the Fair Debt Collection Practices Act. Most states allow collection agencies to collect on debts only for seven years past the date of delinquency. However, in their effort to collect more money, collection agencies may re-age your debt and keep up collection actions for longer than the seven-year period. This is illegal. You can dispute these debts on your credit report and file a complaint with the Federal Trade Commission.

References

Writer Bio

August Jackson is a contributor to various websites. She has taken courses in copywriting and has worked in corporate America as a proofreader. Jackson holds a Bachelor of Arts in English and a Juris Doctor with an emphasis in bankruptcy law.

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