Any company or organization that allows customers to purchase services or goods on a credit account should be aware of the rules and regulations under the Fair Debt Collection Practices Act (FDCPA). This act is intended to protect consumers from unfair debt collection practices. While your company has the right to collect on the money owed, there are regulations and laws about how, when and where you can make the effort to get what you are owed.
Contacting a Debtor
A debt collector is allowed to contact a debtor through several means of communication including fax, telegram, telephone, mail or in person. A debt collector is NOT allowed to contact a debtor while he or she is at work if the debt collector has received previous information that the employer does not approve. A debt collector is also prohibited from contacting a debtor during certain hours, otherwise known as “inconvenient times.” This includes the hours before 8 AM and after 9 PM, unless you have a prior agreement with the debtor to do so.
Definition of Debt Collector
Your company may have any number of people act as debt collectors toward your debtors. This may include, but is not limited to, your attorney or a debt collection agency. It’s important to note that the FDCPA only applies to those who collect debts regularly for their customers – not to those who are directly collecting their individual debts.
This is relevant to any business that extends credit to customers. If your company is contacting customers directly, the FDCPA does not apply to your company. If you hire an individual or business to collect debts for you, the FDCPA does apply to them.
The Debtor’s Right to Stop Collection
When an individual owes your company money and you have sent a debt collector to settle that debt, the debtor does have the right to stop communication, or your efforts to collect. This must be done with a written letter to the collector of the debt asking it to stop. Once the letter is received, the only contact the debt collector is allowed to make is to let the debtor know how to settle the debt and that no more contact will be made. Consumers must understand that sending a letter does not settle the debt; it only stops the collector from contacting them.
Unlawful Practices to Collect Debt
Under the FDCPA, there are certain actions that are prohibited when a debt collector goes to collect money from an individual. In order to ensure that your company doesn’t face retribution from a disgruntled debtor, all debt collectors you work with should operate within these parameters.
- Unfair consequences: A debt collector does not have the right to tell a debtor that it will garnish wages or seize property or that the individual will be arrested if the debt is not paid. The only time this action is lawful is if the creditor or agency has taken legal action to collect on the debt through a lawsuit.
- Harassment: Debt collectors must refrain from abusing, oppressing or harassing any individual they contact about a debt. Threats and violence of harm are strictly prohibited under the FDCPA, and any type of obscene or profane language is illegal under the act.
- Unfair practices: When a debt collector collects a debt, it is not allowed to take more money than the current debt, trick the debtor into taking collect calls, threaten or take any property, or make contact through a postcard.
- False statements: Debt collectors may not represent themselves as something other than they are, or make any type of misleading or false statement when in contact with the debtor.
As your company works to collect on debts that are owed to you, understanding these guidelines ensures that your organization and whoever works for you to collect debts are protected from legal action during the process. Both the debtor and the debt collector are safer when these practices are followed.
The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.