What if a debt collector buys the debt from another debt collector?

I am being contacted by a debt collection agency that has bought my debt from another debt collection agency. I read online that only collection agencies who purchase/are assinged the debt from the original creditor can collect on the debt. So...since they got the debt from a collection agency- are they legally able to collect on this debt?

What if a debt collector buys the debt from another debt collector?
Usually the first collection agency that the debt is sent to is contracted by the original creditor. They will be paid by the OC at a rate of 40-60 % of the amount collected.





If this collector is unable to collect the debt, then it may be sold. Debts are not usually sold individually, but as a package. In other words, your $1000 dollar debt is packaged with 50 others and sold to a collection agency at a HUGE discount.





If the debt has been charged off recently, the collection agency may have paid only six or seven cents on the dollar.





If the debt has been cycled through a couple of different agencies in an attempt to collect, they may have paid less than 2 or 3 cents on the dollar.





If the account is several years old, and is out of statute, they are basically worthless, and may have been sold for one cent or less. In this part of the process the debts are sold in packages that are in the tens of millions, and are traded a lot like stock.





This process is perfectly legal, and you continue to be liable for the debt at every point in the collection process unless the debt has passed the statute of limitations - this varies by state but I wouldnt expect it to be less than 10 years.





http://www.no-debt.net
Reply:I've had the same thing happen to me. According to the FTC, Collection Agencies can not give you the wrong information on the debt. So if you've already started paying the first, and they gave you a higher amount, that's against the law. Also, if both collection agencies report it on your credit report, you can dispute it. The credit bureau has 30 days to investigate it. You can get your free credit report from annualcreditreport.com, and dispute it there. Or buy it off the credit bureaus website.





One thing to do is to validate that the collection agency has the debt. The original creditor has an account number that is given out to the collection agencies, and sometimes the original creditor will pass it on to more than one collection agency. They are legally able to collect on the debt.





You can also try contacting the original creditor, or the original collection agency to see if there is something you can do through them. Some original creditors will pass on the phone number of who to contact, and others will take the payment themselves.





If anything, you can see your rights under ftc.gov
Reply:It is very common for debt to be sold to another collection agency and perfectly legal. In the fine print of your contract, there is wording to the effect that the contract can be sold. Collection agencies can also continue to charge interest and various fees.





Be careful what you read on the internet. There are many credit/debt websites out there that pass out really bad information.
Reply:The laws vary by state. Look at your original contract. Some have a line giving them the right to sell the debt. If the contract does not spell it out then generally you go by the state law. Also remember that even if you sign a contract in one state doesn't mean you aren't being governed by the laws of another. Again this is all in the contracts. Read.
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