Enhanced Recovery Company and other debt collection agencies normally have the following interesting business model:
Debt collection companies like Enhanced Recovery Company buy debts cheap–sometimes for pennies on the dollar–from the original lender.
This could be a credit card company, a bank, a retail store, a medical clinic, or any other entity that offers consumer credit.
The goal here is for the debt collector to get you to repay the debt in full, plus interest, thereby creating a profit for them. If you are aware of this, you may be able to negotiate a smaller settlement.
As long as you let the debt collector make a small profit, they should be happy.
Once a debt collector owns your debt, they have the exclusive right to attempt to collect on it. The original lender is no longer involved, so don’t look to them for help!
Understanding the debt collector’s mindset is key at this stage of the process. The debt collector will be calling you constantly, attempting to get inside your head and pressure you into repaying your debt.
Realize that most of what the debt collector says is psychological warfare, and treat it as such! Don’t try to make friends with them, don’t make small talk, and don’t believe that they have your “best interests” at heart. Also, don’t believe any threats they might make.
Usually, threats are just scare tactics. Debt collectors normally work on commission, so they will say and do just about anything to get to you! Familiarize yourself with your rights under the Fair Debt Collection Practices Act, and keep a log of any violations.
As soon as a debt collector contacts you, you should send them a debt validation letter. If you do this within 30 days of receiving your first collection notice, you can force the debt collector to suspend collection activities and focus on producing proof that your debt is valid for collection.
If the debt is invalid, inaccurate, or unverifiable, the debt collector must abandon the account and leave you alone.
The real trouble starts when the debt collector begins reporting your debts to the credit bureaus as collection items. This can be really damaging.
Each collection item can lower your credit score significantly, and if left unchallenged, they can remain on your record for 7 years. If your credit is damaged by inaccurate collection items, you can use the Fair Credit Reporting Act to get the items removed and your credit repaired.
Knowing that there is hope for recourse against the debt collectors will make a huge difference in your attitude and morale.