A debt collector is a person or company that pursues payment of debts owed by individuals or businesses. In the US, debt collectors are usually either acting on behalf of an original creditor (like a bank or retailer) or have purchased the debt outright from the original creditor.
Types of debt collector in the US
- Debt collection agencies: instructed by a creditor to collect on their behalf. The debt is still owned by the original creditor.
- Debt purchasers: companies that buy debts from original creditors at a discount and then collect the full amount themselves. They are now the legal owner of the debt.
- Bailiffs (enforcement agents): different from debt collectors — they have powers to take goods and can only act following a court order.
What debt collectors are regulated by the FCA
Most debt collectors must be authorised and regulated by the Financial Conduct Authority (FCA). You can check any debt collection firm on the FCA Register at register.fca.org.uk. FCA-regulated debt collectors must follow the Consumer Credit Sourcebook rules on fair debt collection.
What debt collectors can do
- Contact you by letter, phone, email or text to request payment
- Sell or assign your debt to another company
- Apply to court for a County Court Judgement (CCJ) if a debt is unpaid
- Charge interest and fees allowed under your original credit agreement
- Report the debt to credit reference agencies
What debt collectors cannot do
- Pretend to be a court official, bailiff or police officer
- Threaten legal action they cannot or do not intend to take
- Contact you at unreasonable times or in ways designed to intimidate
- Contact you at work if you have told them not to
- Pursue a disputed debt without providing evidence of the amount and origin
- Enter your home without permission
How debt collection works in practice
When you miss payments on a credit agreement, the original creditor (bank, retailer, lender) will typically attempt to contact you directly first. After a period of missed payments — often three to six months — they may issue a Default Notice, which is a formal warning. After default, the creditor has three main options: continue trying to collect internally, pass the account to a specialist debt collection agency (who collect on their behalf for a fee or commission), or sell the debt outright to a debt purchaser.
If the debt is sold, you will receive a Notice of Assignment — a letter telling you that a new company now owns your debt and you should make payments to them instead. The terms of your original agreement cannot be changed by the sale — you cannot owe more than you originally agreed, and the debt purchaser must follow the same FCA rules as the original creditor.
Your rights under FCA rules
The FCA Consumer Credit Sourcebook (CONC) sets out detailed rules on how debt collectors must treat consumers. Key consumer protections include: collectors must not contact you at unreasonable times, must identify themselves clearly, must not use misleading or intimidating language, must provide information about your debt in writing if requested, and must not continue pursuing a genuinely disputed debt without providing evidence.
How to verify a debt collection company
Every FCA-authorised firm has a unique Financial Reference Number (FRN). When a debt collector contacts you, ask for their company name and FCA number, then verify both at register.fca.org.uk. If the company cannot provide an FCA number or cannot be found on the register, do not make any payment and contact Citizens Advice immediately — it may be a scam.