Debt Collection - The Basics - What are Debt Collection Agencies Allowed To Do?
If you are interested in hiring a debt collection agency, you should be aware of what one can and cannot do in your name to collect the debt that is owed to you.
That being said, not many people know what debt collectors are allowed to do. If you are looking for a rabid bloodhound to track down your debts and attack until they’ve been retrieved, I’m afraid you’ve come to the wrong place. Idealy, a professional collection service should strive to create a dialogue with the debtor in the hopes of peacefully settling the debt. The agency will remind the debtor of the facts and convince them that it is in their best interests to pay off the debt. Once the debtor has been contacted, they should respond positively and either pay off their debt in full or work out a payment plan with the debt collector. At no point should this become a daily grind against the debtor’s sanity.
What debts are covered?
Personal, family, and household debts are covered under the Fair Debt Collection Practices Act (federal law). This includes money owed for the purchase of a car, for medical care, or for charged accounts.
How can debt a collector contact your debtors?
A collector may contact your target debtor in person, by mail, telephone, telegram (oddly enough), or fax. However a debt collector may not contact them at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless they agree. A debt collector also may not contact them at work. They also may not contact them via cell phone, unless they have listed that as their main number.
May a debt collector contact anyone else about your debtor’s debt?
A debt collector may contact other people, but only to find:
Collection agencies are not allowed to hassle your debtor’s friends and family for debt that they owe. Tactics like those are against the rules of the FDCPA and are liable to get both their company and your company in trouble.
What must the debt collector tell your debtors about their debt?
What types of debt collection practices are prohibited?
Debt collectors my NOT harass, oppress, or abuse your debtor or any third parties they contact. For example, debt collectors may not:
Debt collectors may not use any false or misleading statements when collecting a debt. For example debt collectors may not:
Debt collectors may not state that:
If you find out that the collection agency you’ve hired engages in these illegal practices, I would suggest finding a new agency before their shenanigans come back to bring your company grief.
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ABOUT THE AUTHOR
KJ Keller is the vice president of Enterprise Debt Recovery INC, a debt collection agency based in Chicagoland that services companies in Illinois.