KLS Financial Services is a third-party debt collection agency that contacts consumers about unpaid bills, often from credit cards, medical accounts, or other overdue debts. If you’ve received a call, letter, or email from them, it likely means they are trying to collect on a debt in your name. It's important to verify the debt, understand your rights under the Fair Debt Collection Practices Act (FDCPA), and explore your options before responding.
Disclaimer: The information in this blog is provided for general educational purposes only and does not constitute legal, financial, or professional advice. We are not affiliated with KLS Financial Services. Always verify any debt and speak with a qualified attorney or financial advisor before making decisions regarding debt collection.
Did you know that according to the Consumer Financial Protection Bureau (CFPB), 1 in 4 consumers report being contacted about a debt they do not believe they owe? So, each year, millions of people are pursued for collections that are inaccurate, outdated, or already paid. This is all without realizing they have the right to challenge these claims.
At ASAP Credit Repair, we’ve helped countless clients dispute incorrect collection accounts, remove damaging errors from their credit reports, and regain control of their financial health.
We've worked with individuals contacted by companies like KLS Financial Services and understand exactly how to navigate these situations. Now, we're going to explain everything about them, so you’ll understand what's happening and what you can do about it.
What Is KLS Financial Services?
KLS Financial Services is a legitimate debt collection agency based in North Carolina. The agency has been in the business since 2017 and specializes in delinquent medical bills and commercial debt (like credit card debt). The company is headquartered at 991 Aviation Pkwy STE 500 Morrisville, NC 27560-8564.
You can contact them directly at 833-447-3557.
Think of them as a company that other businesses hire to collect money that people owe.
To understand this better, imagine you borrowed $20 from your friend Sarah, but you forgot to pay her back. After a while, Sarah might ask her older brother Mike to help her get the money back from you. In this example, Mike would be like a debt collector, someone who helps collect money that's owed to someone else.
KLS Financial Services Reviews
KLS Financial Services is accredited by the Better Business Bureau (BBB) and holds an A+ rating, which indicates they have agreed to uphold certain standards for resolving complaints and conducting business ethically.
However, it’s important to understand that this rating does not guarantee that every consumer experience will be positive or that every debt they attempt to collect is accurate. Always verify any debt and know your rights before making payments or sharing personal information.
According to KLS Financial Services’ own website, “There is much more to collections than just collecting the money.” The company states that its goal is to help both clients (typically creditors) and consumers find workable solutions. While this suggests a cooperative approach, your experience may vary, so it’s essential to stay informed and proceed with caution when dealing with any debt collector.
How Companies Like KLS Financial Services Operate
Understanding how debt collection companies work, especially ones like KLS Financial Services, can help you make smarter decisions when dealing with them. KLS describes their approach as a “Win-Win-Win” scenario:
- Clients recover money they are fairly and justly owed.
- Consumers are treated with respect, offered affordable solutions, and guided toward financial literacy.
- KLS earns a return on its investment while maintaining ethical standards.
That sounds reasonable, but to better understand their approach, it’s helpful to look at how the debt collection business model works behind the scenes.
How Debt Collectors Make Money
Debt collection agencies like KLS typically operate in one of two ways:
- Portfolio Purchasing: They buy large bundles of unpaid debts from original creditors (such as banks or hospitals) for a fraction of the total owed. For example, they might pay $100 for a $1,000 debt. If they recover even $200 from you, they’ve doubled their money.
- Commission-Based Collections: In other cases, they don’t own the debt. Instead, they collect it on behalf of the original creditor and keep a portion (usually between 25% and 50%) of whatever they recover.
Because they operate on slim margins and handle thousands of accounts, volume is key. They know some debts will never be collected, so they're often open to negotiations. It’s better for them to get some money than nothing at all.
This is why you may be able to settle for less than the full balance. However, not all the time, you have to pay debts right away…
Understanding The Debt Collection Industry
Here’s a simple breakdown of what happens before you hear from a company like KLS:
- You fall behind on a bill – This could be anything from a credit card balance to a medical bill.
- The original company tries to collect – They’ll send reminders, make phone calls, and try to recover the amount themselves.
- The debt is placed or sold – If you don’t pay after a few months, the company either hires a collection agency like KLS (placing the debt) or sells it altogether, often for pennies on the dollar.
This is how KLS may end up contacting you. And because they either bought your debt for a steep discount or are working on commission, they’re often willing to work out a deal.
Tip: Just because a collector contacts you doesn’t mean the debt is accurate, valid, or enforceable. Always ask for written verification and understand your rights before making any payments.
Why Is KLS Financial Services Contacting You?
If KLS Financial Services is reaching out to you, it almost always has something to do with a debt, either one you owe directly or one that has been mistakenly linked to your name.
Here are a few common reasons why they may be contacting you:
1. You Have an Unpaid Medical Bill
KLS Financial Services Inc. (KLS) is a third-party collection agency that specializes in collecting delinquent medical bills. Medical debt is one of the most common reasons people get contacted by debt collectors. Maybe you went to the doctor or hospital and couldn't afford to pay the full bill, or perhaps your insurance didn't cover everything.
2. You Have Unpaid Credit Card or Commercial Debt
The agency specializes in delinquent medical bills and commercial debt (like credit card debt). This could include money you owe on credit cards, personal loans, or other types of consumer debt.
3. The Debt Might Not Actually Be Yours
Sometimes debt collectors contact the wrong person. This can happen if:
- You have a similar name to someone who actually owes the money
- There was a mistake in their records
- Your information got mixed up with someone else's
- The debt is from identity theft (someone used your information without permission)
4. The Debt Might Be Too Old
Every state has something called a "statute of limitations" on debt. This means that after a certain number of years (most of the time, 3-6 years depending on your state), debt collectors can't successfully sue you for the money, even if you do owe it.
Understanding Your Rights: The Fair Debt Collection Practices Act (FDCPA)
As a consumer, you have important rights when dealing with debt collectors. These rights are protected by a federal law called the Fair Debt Collection Practices Act, or FDCPA for short. The Fair Debt Collection Practices Act (FDCPA) makes it illegal for debt collectors to use abusive, unfair, or deceptive practices when they collect debts.
Consumer advocacy experts report that the most common debt collection complaints in 2023 were attempts to collect debts not owed, and the Consumer Financial Protection Bureau received thousands of debt collection complaints, showing just how common problems with debt collectors can be.
What Debt Collectors CAN Do:
- Contact you by phone, mail, or email (within certain limits)
- Ask you to pay the debt
- Report the debt to credit reporting agencies
- Sue you in court if the debt is valid and not too old
What Debt Collectors CANNOT Do:
The FDCPA prohibits debt collectors from:
- Harassment can include repetitive phone calls, calling very early or very late, obscene or threatening language, publicizing the debt, and calling without identifying themselves as a debt collector.
- Lying about who they are or how much you owe
- Threatening to arrest you or take legal action they can't or won't take
- Calling you at work if you tell them not to
- Discussing your debt with other people (like family members, unless they're also responsible for the debt)
Important Rights You Have:
- The right to request debt validation - You can ask the debt collector to prove that you actually owe the money and that they have the right to collect it.
- The right to dispute the debt - If you don't think you owe the money, you can dispute it in writing.
- The right to stop communication - You can send a written letter telling the debt collector to stop contacting you.
- The right to choose how they contact you - You can tell them only to contact you by mail, for example.
Quick Reference Review About KLS Financial Services
Company Details:
- Name: KLS Financial Services, Inc.
- Address: 991 Aviation Parkway, Suite 500, Morrisville, NC 27560
- Phone: 833-447-3557 (toll-free)
- Website: klsfinancialservice.com
- BBB Rating: A+ (Accredited since 2018)
- Specialization: Medical debt and commercial debt collection
- Founded: 2017
What To Do When KLS Financial Services Contacts You
Getting contacted by a debt collector can be stressful, but there are specific steps you should take to protect yourself:
Step 1: Don't Panic, But Don't Ignore It
While it's natural to feel worried, remember that being contacted by a debt collector doesn't mean you're in immediate legal trouble. However, ignoring the situation won't make it go away and could make things worse.
Step 2: Ask for Written Verification
Within five days of first contacting you, debt collectors are required by law to send you a written notice that includes:
- The amount of the debt
- The name of the original creditor (who you originally owed money to)
- A statement that you have 30 days to dispute the debt if you think it's wrong
If you don't receive this information, ask for it in writing.
Step 3: Verify the Debt
Don't just take their word for it that you owe the money. Ask KLS Financial Services to provide:
- Proof that you actually owe the debt
- Proof that they have the legal right to collect it
- The original contract or agreement that created the debt
- A complete payment history
As noted in consumer complaints, "KLS Financial Services has not sent a collection letter" in some cases, and consumers have reported that "They did not provide me with the original contract as I requested."
Step 4: Check Your Credit Report
You can get a free copy of your credit report from all three major credit reporting agencies once per year at annualcreditreport.com. "If you're seeing them on your credit report you likely have an unpaid balance." Look to see if KLS Financial Services has reported the debt and whether the information looks accurate.
Step 5: Consider Your Options
Once you've verified whether the debt is legitimate, you have several options:
- Option 1: Pay the Debt in Full If you owe the money and can afford to pay it, this will resolve the situation completely.
- Option 2: Negotiate a Settlement Debt collectors often accept less than the full amount owed. Since "they paid pennies on the dollar, sometimes 1/10th of the original" amount for the debt, they may be willing to settle for 30-70% of what you owe.
- Option 3: Set Up a Payment Plan If you can't pay all at once, you might be able to arrange monthly payments.
- Option 4: Dispute the Debt If you don't think you owe the money, you can dispute it in writing within 30 days of receiving their first written notice.
- Option 5: Seek Legal Help If you think the debt collector is violating your rights or if the situation is complex, consider talking to a consumer rights attorney.
How to Handle KLS Financial Services
Red Flags: When KLS Financial Services Might Be Breaking the Law
KLS has received consumer complaints alleging violations of the Fair Debt Collection Practices Act (FDCPA), such as failing to provide written verification information. Here are some warning signs that a debt collector might be violating your rights:
- They refuse to provide written verification of the debt
- They call you repeatedly throughout the day
- They call very early in the morning (before 8 AM) or late at night (after 9 PM)
- They threaten to have you arrested
- They use profane or abusive language
- They call your workplace after you've told them not to
- They discuss your debt with family members or friends
- They claim to be attorneys when they're not
- They threaten legal action they don't intend to take
How Debt Collection Affects Your Credit Score
Having a debt in collections can seriously impact your credit score, which affects your ability to get loans, credit cards, or even rent an apartment in the future. Here's what you need to know:
- Immediate Impact: When a debt goes to collections, it can cause your credit score to drop by 50-100 points or more.
- Long-term Impact: Collection accounts can stay on your credit report for up to seven years from the date the original debt first became delinquent.
- Payment Impact: Paying off a collection account won't immediately remove it from your credit report, but it will show as "paid" which looks better to future lenders than "unpaid."
- Negotiation Opportunity: Sometimes you can negotiate with the debt collector to remove the collection account from your credit report in exchange for payment. This is called a "pay for delete" agreement.
Prevention: How to Avoid Future Debt Collection Issues
While dealing with your current situation with KLS Financial Services is important, it's also valuable to understand how to prevent similar situations in the future:
1. Stay Organized with Your Bills
Keep track of all your bills and due dates. Consider using a calendar app or notebook to write down when bills are due.
2. Communicate with Creditors Early
If you're having trouble paying a bill, contact the original creditor (like your credit card company or doctor's office) before the account goes to collections. Many companies are willing to work out payment plans or other arrangements.
3. Understand Your Insurance
For medical bills specifically, make sure you understand what your health insurance covers and doesn't cover. Always verify that your insurance has been billed before paying medical bills.
4. Monitor Your Credit Report
Check your credit report regularly (you can do this for free once per year) to catch any errors or accounts you don't recognize.
5. Build an Emergency Fund
Having even a small amount of money set aside for emergencies can help you avoid having bills go unpaid when unexpected expenses arise.
When to Seek Professional Help
There are several situations where you might want to consider getting help from a professional:
- Consumer Rights Attorney: If you believe KLS Financial Services has violated the FDCPA, an attorney who specializes in consumer rights can help you understand your options and potentially file a lawsuit.
- Credit Counselor: Non-profit credit counseling agencies can help you create a budget and develop a plan for managing your debts.
- Financial Advisor: If you're dealing with multiple debts or complex financial issues, a financial advisor can help you develop a comprehensive plan.
- Legal Aid: If you can't afford an attorney, you might qualify for free legal help through legal aid organizations in your area.
The Bigger Picture: Medical Debt in America
Since KLS Financial Services specializes in collecting delinquent medical bills, it's worth understanding that you're not alone if you're dealing with medical debt. Medical debt is one of the leading causes of financial problems for American families.
According to consumer advocates, medical debt affects millions of Americans each year, and it's often unavoidable due to:
- High deductibles and copays
- Surprise medical bills
- Insurance coverage gaps
- Emergency medical situations
- Chronic health conditions requiring ongoing treatment
Understanding that medical debt is a widespread problem can help reduce the shame or embarrassment you might feel about your situation.
Conclusion: Taking Control of Your Financial Situation
Receiving contact from KLS Financial Services doesn't have to be a nightmare scenario. By understanding who they are, what your rights are, and what options you have, you can take control of the situation and work toward a resolution.
Remember these key points:
- KLS Financial Services is a legitimate debt collection agency, but that doesn't mean every debt they try to collect is valid
- You have specific rights under federal law that protect you from abusive collection practices
- You have options, including negotiating a settlement, setting up a payment plan, or disputing the debt if you don't think you owe it
- Taking action is better than ignoring the situation
- Professional help is available if you need it
The most important thing is not to panic.
Thousands of people deal with debt collectors every day, and there are well-established laws and procedures designed to protect you. By staying informed about your rights and exploring your options, you can handle the situation confidently and take steps toward improving your financial future.
Whether the debt is valid or not, whether you can afford to pay it or not, you have rights and you have options. Take time to understand your situation fully before making any decisions. And if you're feeling overwhelmed or unsure where to start, don’t hesitate to seek help.
ASAP Credit Repair is here to guide you through the process. We help everyday people clean up their credit, challenge inaccurate collections, and get back on the path to financial stability. Get a free consultation today and take the first step toward taking control of your credit!
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