How Electronic Debt Collection Works Today


The concept of debt is many thousands of years old, and is at least as old as the idea of currency itself. What has changed, meanwhile, is the efficiency and flexibility of debt collection agency work, and court collections, debt collection for auto or home loans, and other debt collection services have new ways of obtaining the money that they are owed. This is not to suggest that a debt collection agency is acting aggressively or unfairly; far from it. In fact, a modern debt collection agency makes it easy and convenient for any private debtor to pay what they owe at any time, and a modern debt collection agency may make use of the Internet, card scanners, and more to ensure prompt, convenient, and secure payments at any time of day. Some consumers may mail checks or money orders to parties to whom they owe, but today’s debt collection agency businesses offer even more. In what situation might an American consumer deal with a debt collection agency, and what are some trends for these different industries and debt?

Consumer Debt and Property

A common scenario for paying a debt is simply when an American consumer makes a purchase. A debt does not have to be something scary or overwhelming; in fact, just buying the week’s groceries incurs a debt that is soon paid with ease. Someone who visits a Target or a Trader Joe’s, for example, will arrive at the checkout counter with their items and soon incur a debt once the bar codes of all those items are scanned. The consumer is now in debt, but that debt will be quite affordable and is paid off almost right away. In some cases, the buyer will have cash and the cashier will accept it. In other cases, a consumer will present a credit or debit card, and such cards have magnetic strips in them that a laser-based scanner may then read. The same is true for gift cards, should the shopper have one. At any rate, the employee will scan the card to connect to the buyer’s bank or credit card company, and the correct funds will be transferred as necessary to collect that debt. In many cases, that’s really all there is to debt collection: get items at the store, and offer a credit card to pay for them. Some modern debit or credit card even have chips in them that readers may scan, and these act as further counter-measures against fraud or theft.

Auto dealers also make use of debt collection agencies. A car or pickup truck is much too expensive for most buyers to purchase right away, so instead, a buyer will get a loan by means of on-site financing services. An auto dealer may be connected to as many as five to 10 different money lenders such as banks, and once a loan is taken out, the consumer will pay back that loan through a debt collection agency. They may mail checks of money orders to the correct party, usually the lender, or they may make payments online or by phone. This can prove quite convenient for the debtor, who may pay off their loans using whatever means they choose. Some prefer paper mail; others may call their debt collection agency and provide credit card or debit card information that way, and the funds are transferred. Some may do this online by entering all the correct information, and Internet-savvy borrowers may even set up recurring, automatic payments. Someone who buys a car may make an online account, then sign up for those recurring payments. So long as the funds and proper accounts exist, the funds are transferred automatically.

Other Debts

Other services may also make use of a debt collection agency. A court, for example, may collect fines and fees from a person, and this ranges from giving cash or a check to the clerk all the way to scanning a debit card or credit card. A person may pay off parking tickets or other fines in this manner, for example. Service providers such as home repair crews may ask for checks or may be paid with a card. Such professionals may have a computer tablet with a card reader on it.

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