Adjustment Bureau

An adjustment bureau is an organization that focuses on helping businesses to collect outstanding debts from delinquent debtors. Adjustment bureaus are also known as collection agencies. Most adjustment bureaus earn a percentage of the outstanding debt upon successful collection. An adjustment bureau is not a loan agency or a debt consolidation service; they serve their business clients as opposed to the debtors.

While most adjustment bureaus are privately owned, they operate under collection laws established by the federal government. These laws are in place to prevent abusive practices. The Fair Debt Collection Practices Act (FDCPA) is the primary federal law governing debt collection practices in the United States. Under it, a consumer may sue an adjustment bureau that has violated the Act. The Federal Trade Commission (FTC) or the state attorney general of the state in which the bureau operates also have the authority to impose penalties against a collection agency that does not comply with the FDCPA. These penalties can include damages or fines, restricting the adjustment bureau’s operations, or shutting them down. The FTC closed down more than 60 companies between 2010 and 2016 for not complying with the FDCPA.

Under the FDCPA, debtors have the right to the following protections:

• The right to request validation of the debt in writing;
• The right to demand that the adjustment bureau or collection agency cease communications;
• The right to collect attorney’s fees from the debt collector if the debtor sues to verify the debt and the debt is found to be bogus;
• Freedom from debt collection calls that cost the debtor toll calls;
• Limits on the times of day at which debt collectors can call debtors;
• Freedom from the use of deceptive or illegal collection practices, such as threats or impersonating law enforcement;
• Freedom from use of obscene language by the debt collector;
• The right to information about the nature of the call, the name of the person calling, the name of the adjustment bureau he or she is calling from; and
• Freedom from debt collection calls at his or her place of work.

Many states also have laws regulating the collection practices adjustment bureaus may use. The FDCPA dictates that, in the case that a state law is more restrictive than the federal law in governing debt collection practices, the more restrictive state law will be applied.

Fees charged are usually on a sliding scale and on a contingency basis. For example, the larger the outstanding debt, the smaller the percentage earned. The amount earned on a $2000.00 balance might be 10%, but the amount earned on a $10,000.00 balance would be 8%.