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What's the Difference Between a Loan Servicer and a Debt Collector?

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Customers who feel that their rights are being violated should contact the Federal Trade Commission or a debt collection attorney to look into the chance of violations under the FDCPA. The FDCPA is an acronym for Fair Debt Collection Practices Act and is regulated and enforced by the FTC. FDCPA gives these agencies regulations as to what they may and may not do in an effort to contact customers. It does not apply to original debt collectors, only to agencies that purchase debt. The FDCPA can help those that feel that they are being abused and harassed by those agencies that are contacting them.

You may be contacted by an agency that services the debt that you have and not the actual agency who owns the debt. This agency is known as the loan servicer. The loan servicer does the service on a loan (calling, debt collection) on behalf of the actual collection agency. Loan servicers generally make income from things on the debt such as interest, late charges, etc. A debt collector is an organization that owns the loan (either they are the original lender or they purchased the loan). The debt collector may or may not contact you or provide the service on the loan. A loan servicer will tell you, through mail or phone communication, that they are contacting you on behalf of another company.

It is recommended that you contact several attorneys that specialize in FDCPA before making a decision. They can be found through your state’s bar association or by doing an online search. Also, ask friends and family for recommendations. Try to get an initial phone consultation as well as an in-person meeting with any attorney that you are considering. Also, this is the time to ask the attorney to review any evidence that you may have. The attorney will tell you if they will take your case on and how they recommend to go forward. FDCPA attorneys can vary widely in terms of experience.