Can a Collection Agency View Your Credit Report Before Notifying You In Writing?

June 26, 2012 by  Filed under: Credit 

Charging your groceries, utility bills, clothes, accessories and out of town trip to your credit card is very convenient. However, receiving your monthly billing statement is another matter. You might feel faint from disbelief on the sky high amount that is due for payment later in the month. Well, you did go on a shopping spree. Now, it is time to buck up and face the music. If you went on a binge and totally forgot about your monthly budget, then this will be a financial predicament that you have to untangle. Best option is to pay at least the minimum amount due of your bill on or before the due date to avoid more charges.

However, have you experienced instances where everything seemed to spiral out of control? And have you been in a position where you can barely make ends meet? And the worst case is that you are unable to pay even the minimum amount due? If you answered yes to all these questions, then your credit card is now on delinquent status. Depending on your bank’s set-up, their collections unit may be bank personnel or they may outsource this to collection agencies.

For most banks, credit card accounts with 1-29 days past due are more likely to be handled by bank officers. Employees of the collections department will now be contacting you by phone, email or regular mail. At this point, there is no legal action or written summons yet. The bank personnel will simply inform you that you may have forgotten to pay off your credit card balance on the due date. You will now be encouraged by them to settle your outstanding balance at the soonest possible time, preferably before your next billing statement comes out so as to avoid further exorbitant bank charges. Failure to comply with the deadline set by the bank will result in possible cancellation of your credit card facility.

Once your credit card is cancelled by your bank, then this will now be for possible write off. What does this mean? It means that you can no longer use your credit card. Your name will now be submitted to credit bureaus for delinquency. And your name may now be submitted by your bank to collection agencies who will handle the acquisition of your payments in the bank’s behalf. When this happens, you should not be surprised at all if someone not from your bank will be notifying you about your credit card debt.

Collection agencies are hired by your bank to collect your outstanding credit card debts. In order for them to fully understand your financial situation, they are allowed to check your credit report. And they definitely can do so even without your permission. Bank secrecy law may no longer apply for matters such as these. You need not fret though. These collection agencies are contracted by financial institutions such as banks to collect outstanding debts in their behalf. They are required by the banks to sign customer confidentiality agreements to protect your rights. Cooperating with the collection agency is of utmost importance because they are there to help you pay off your debt and not to harass you.

The author gives tips when it comes to getting credit reports in South Africa. To read more visit

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