Which law gives a third party debt collector the right to purchase a debt?

[Simple Words]

Does anyone know under which law a third party debt collector is given the right to purchase a debt from the original lender and then collect on it? If a debtor never borrowed any money from this third party, why should they have to pay them? I find that these collection agencies that purchase debts run their businesses by taking advantage of people's misfortunes many times.

Also, why aren't original lenders required to inform the debtor that their debt is being sold to a third party? For the longest time when I was behind on a debt I always thought that when they told me they were going to send my debt to collection, it was like a separate department within the company of the lender where they would close my account (so I wouldn't be able to use it again), process to collect the debt, and report to the credit bureau.

Which laws support these debt collection practices?

 

[sassy2]

Your debt is the private property of the lender. They do not need a law to sell private property. You were told the overdue bill was going to collections. Ignorance of finances is not the company's problem but yours. There is plenty of knowledge available on the internet that will instruct you on the proper way to handle overdue bills. How to Negotiate for less and so on.