General banks and insurance companies hand over credit card arrears, small non-performing loans and insurance claims to third-party companies for collection through entrustment contracts signed with third-party companies (often in the name of management companies, consulting companies and finance companies). This kind of collection is essentially different from entrusting professional legal institutions such as law firms to collect money through non-litigation or litigation.
Banks and insurance companies are enterprise management after all. In the reality that debt collection is difficult, rampant and costly, choosing a third-party debt collection company may become one of its more economical choices. But I don't know that this practice is also quite harmful:
1. Many third-party companies will use the illegal means mentioned above to collect debts, which will easily infringe on the legitimate rights and interests of debtors and lead to various criminal and civil disputes. At the same time, it is also possible to disclose the personal information of the debtor, which not only brings trouble to users, but also risks that the information will be used for other illegal things. For creditors, illegal debt collection may be an economic choice, but if the debtor's personal and property rights and interests are infringed, the responsibility cannot escape.
2. This practice of banks and insurance companies is contrary to the purpose of prohibiting debt collection companies by the state. As a national financial institution, this practice sets a bad example-I would rather trust the banned debt collection companies than the formal legal institutions, and I would rather entrust the debt collection companies to take informal means to collect debts than take proper legal means to safeguard the creditor's rights. It seems that the law is useless, encouraging non-compliance, and doing great harm to China's legal system construction.
Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.