What’s the Difference Between a Debt Buyer and an Original Creditor?

By: Robert J. Nahoum

A man in suit and tie with his arms crossed.



An unfamiliar name shows up on your credit report as a company you owe money; you get debt collection letter in the mail saying you owe money to a company you’ve never heard of; you’re being sued for a debt by a company you don’t know.

The reason you’ve never heard of these companies is because, while you’ve never done business with them, they’re doing business with someone who knows you.  There is an industry out there waiting in the shadows of traditional banks, credit card companies and doctors to buy up, for pennies on the dollar, portfolios of debt from the people with whom you originally did business.  These bottom feeders are called debt buyers and they make boat loads of money collecting old consumer debts.

The Rule:

The difference between an “original creditor†who originally extended you the credit animportant because often, there are different rules that apply.

Federal debt collection laws known as the Fair Debt Collection Practices Act (FDCPA for short), regulates the conduct of third party debt collectors like debt buyers, collecting debts that are not originally their own.  Debt collectors subject to the FDCPA must not use false, misleading or harassing debt collection tactics.  Original creditors are generally not subject to these restrictions.

Additionally, in some court systems like in New York, debt buyers who actually sue consumers are required to include in their court papers an adequate identification of who the original creditor is and how the debt buyer came to acquire the debt.


If you’ve received a collection letter, been sued for a consumer debt or discovered a consumer debt on your credit report you should determine if you’re dealing with an original creditor or a debt buyer.  This distinction should guide the course you plan to take in dealing with the problem.  For example, debt buyers routinely have problems proving in court that you owe them the debt.  For that reason, you may have greater leverage in settling the debt with a debt buyer than you do with an original creditor.  Also, debt collectors regularly violate the FDCPA.  If you’ve been the victim of an FDCPA violation, you may sue the debt collector for statutory damages up to $1,000.00, actual damages (like pain and suffering) and the debt collector may have to pay for your attorney.

If you need help settling or defending a debt collection law suit, stopping harassing debt collectors or suing a debt collector, contact us today to see what we can do for you.

The Law Offices of Robert J. Nahoum, P.C
(845) 232-0202
web: www.nahoumlaw.com
email: info@nahoumlaw.com

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