Debt Collection Notice for Derogatory Accounts

DEBT COLLECTION NOTICE FOR DEROGATORY ACCOUNTS AND COLLECTION SERVICES AGREEMENT

Parties and Account Identification

Account Number:    Original Creditor:    Outstanding Balance: $

Date of First Delinquency (default):    Last Payment Date:

Recitals

WHEREAS, Creditor Name: is the holder of an account referenced above that is presently delinquent and characterized as derogatory; and

WHEREAS, Collection Agency: is duly engaged in the business of collecting delinquent consumer and commercial accounts and has represented that it is qualified and authorized to undertake collection efforts on behalf of the Creditor; and

WHEREAS, the parties desire to document certain notice provisions to the Debtor and the terms under which the Collection Agency will attempt to recover the delinquent amounts identified herein.

Notice of Account - Disclosure to Debtor

This notice serves as formal notification to the Debtor that the account identified above is referred for collection as a derogatory account. The Collection Agency will, on behalf of the Creditor, provide the following particulars to the Debtor:

Current Principal Balance: $; Applicable Interest/Fees: $; Total Claimed Due: $

Description of Debt:

Scope of Work

The Collection Agency shall perform commercially reasonable collection activities on the referred account, which may include written notices, telephone contact, skip tracing, account investigation, negotiation of settlement, processing of payments, and limited legal referrals as authorized in writing by the Creditor. The Collection Agency will maintain records of all communications and provide periodic status reports to the Creditor as described below.

Payment Terms

Collection Fee (contingency): . Minimum Commission (if any): $.

Late Payment or Chargebacks: Payments not remitted by the Collection Agency to the Creditor within the agreed remittance period shall incur a late fee of of the outstanding remittance amount per month, or a flat fee of $, whichever is greater.

Term and Termination

Agreement Effective Date: . Agreement End Date (if any): .

Either party may terminate this Agreement for convenience upon days' prior written notice. Termination for cause may be effected immediately upon written notice if the other party materially breaches any obligation and fails to cure within days of receipt of notice specifying the breach.

Upon termination, the Collection Agency shall cease collection activity and remit all collected funds, less agreed commissions, within the remittance period specified above, and shall provide an accounting of all actions taken, funds collected, and outstanding balances.

Confidentiality

The parties acknowledge that in the performance of this Agreement, each may receive or have access to non-public business information and personal data related to Debtors. Each party shall maintain such information in strict confidence and shall not disclose it to any third party except (a) as necessary to perform its obligations under this Agreement, (b) as required by law, or (c) with the prior written consent of the other party. The Collection Agency shall implement and maintain commercially reasonable safeguards to protect personally identifiable information against unauthorized access, use or disclosure.

Debtor Rights and Validation

The Collection Agency shall include with its initial communication to the Debtor a statement of the Debtor's right to dispute the validity of the debt and to request verification. If the Debtor disputes the debt in writing within thirty (30) days of receipt of the notice, the Collection Agency will cease collection efforts until it provides the requested verification to the Debtor or receives further instruction from the Creditor.

Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to conflict of law principles.

Indemnification

Each party shall indemnify, defend and hold the other harmless from and against any third-party claims, liabilities, losses, damages, costs and expenses (including reasonable attorneys' fees) arising from its own negligent acts or willful misconduct in connection with performance under this Agreement. The Collection Agency's indemnity shall include claims arising from any improper disclosure to third parties in violation of the Confidentiality provisions.

Entire Agreement

This Agreement, including any written attachments and account-specific notices, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, understandings and agreements, whether written or oral. No amendment to this Agreement shall be effective unless in writing and signed by duly authorized representatives of both parties.

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