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Common Collection Terms

Accounts Receivable — Money that is owed to a person or organization for products or services provided on credit, in advance of payment.

Aging Report or Schedule — A list of accounts receivable broken down by number of days until due or number of days past due.

Bad Debt — Accounts receivable owed, but not yet paid, that will likely remain uncollectible.

Collection Agency — A business that collects payment on delinquent accounts.

Contingency Fee — A fee for the services of a collection agency to obtain money owed, that is calculated as a portion or percentage of the entire sum collected.

Credit Bureau — A business that compiles reported financial data from many sources and creates a credit file that reflects someone's personal credit history. There are currently 3 major national credit bureaus that provide such information: Experian, Equifax, and TransUnion.

Creditor — A person or organization that is owed money, after having provided products or services to a client on credit, in advance of receiving payment.

Debtor — An individual or company that owes payment to another individual or company (the creditor).

Fair Debt Collection Practices Act — A 1977 federal law that serves to regulate collection agencies. The FDCPA outlines the conditions under which collection agencies may operate in an effort to prevent deception, harassment, and other unfair debt collection practices.

Good Faith — Honest intent. An effort to properly fulfill an obligation as per agreement or promise.

Less than Promised — Being paid less than the agreed upon payment for services. If a contract does not have an excess mileage fee, then not being paid for excess mileage should not be considered a short payment.

NCOA — National Change of Address. This is a special data processing service that updates a person's address if they have filed a change of address with the U.S. Postal Service.

Past Due —A payment delayed beyond an agreed upon time for settlement. For example, a signing service contract might state that payments will be made within 30 days of the end of the month, provided the service was invoiced during that month. Under this arrangement, a payment arriving beyond 30 days from the signing could be within the agreed upon time for settlement — and would not be considered past due. Likewise, when a contract states that a transaction must close for the Notary to be paid, then non-payment for services upon non-closure should not be considered a non-payment.

Services Rendered — Services that were performed or completed.

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