The creditor is the company that has provided goods, services, or a monetary loan to a consumer. For example, credit card companies, medical providers, utility companies, and banks are creditors. When a consumer falls behind on payments, the creditor may begin procedures to collect the past due balance. The consumer may receive phone calls or letters from the creditor's collection department for a period of time, after which the creditor will assign to a debt collector.
Third Party Debt Collector
When the creditor's collection department is unsuccessful in collecting the debt, the creditor may decide to hire a third party to collect the debt. This may be a collection agency, law firm collector or a debt buyer . These third party collectors will begin collection procedures, such as placing phone calls or sending letters, to collect the debt.
Once a debt has been assigned or sold by the creditor to a collector, the consumer has rights under the Fair Debt Collection Practices Act.