Collection Definitions and what they mean for your company

Collections: The sum of money recovered for a Client’s outstanding claim.

Debt:  The term "debt" means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment. www.ftc.gov/os/statutes/fdcpa/fdcpact.htm#801

Debt collector:  The term "debt collector" means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. Notwithstanding the exclusion provided by clause (F) of the last sentence of this paragraph, the term includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts. For the purpose of section 808(6), such term also includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests. The term does not include --

(A) any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor;

(B) any person while acting as a debt collector for another person, both of whom are related by common ownership or affiliated by corporate control, if the person acting as a debt collector does so only for persons to whom it is so related or affiliated and if the principal business of such person is not the collection of debts;

(C) any officer or employee of the United States or any State to the extent that collecting or attempting to collect any debt is in the performance of his official duties;

(D) any person while serving or attempting to serve legal process on any other person in connection with the judicial enforcement of any debt;

(E) any nonprofit organization which, at the request of consumers, performs bona fide consumer credit counseling and assists consumers in the liquidation of their debts by receiving payments from such consumers and distributing such amounts to creditors; and

(F) any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity (i) is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement; (ii) concerns a debt which was originated by such person; (iii) concerns a debt which was not in default at the time it was obtained by such person; or (iv) concerns a debt obtained by such person as a secured party in a commercial credit transaction involving the creditor. www.ftc.gov/os/statutes/fdcpa/fdcpact.htm#801

Medical Claim:  a contract with a doctor or medical personnel for services rendered.

Retail Claim: goods and services rendered to the consumer with the intent of compensation for the goods and services.

NSF’s:  non-suficient funds for payment of services, and in some instances writing checks on a closed account.

Commercial Claim:  goods and services provided to a business with the intent of compensation for the goods and services.

Subrogation: the legal right that a person or corporation has when he pays that person’s debt to recover that money from the debtor. www.sands-trustee.com/rs.htm  The substitution of the insurer for the insured to pursue any rights the insured has against a third party liable for a loss paid by the insurer. www.patrons.com/html/body_glossary.html

Uninsured and underinsured property damage: Uninsured and Underinsured Motorist Coverage (UM)

In states where Uninsured Property Damage is not offered (24 states), companies usually just define UMBI as UM, without the added extension of BI because there is no other UM offered in that state.

Underinsured Motorist Property Damage (UNDPD):

Covers when property damage is sustained by an insured and the negligent operator possesses insurance, but the limits of liability carried by the negligent driver are not sufficient to cover the damages. www.carinsurance.com/coveragedefinitions.aspx