Today’s businesses have a wide variety of debt recovery procedures they can follow to try and get the money owed to them. Just as there are legal ways for going about getting their money, however, there are also illegal ways. Many businesses engage in illegal debt recovery methods without even realizing they are doing so. Or, worse yet, they hire a collection agency that engages in illegal methods. Illegal debt collection practices not only make a business look bad, but they can also cause it to get into legal trouble. To avoid problems for your business, know the laws as they relate to debt collection, follow them, and make sure you only deal with debt collection agencies that do the same.
The biggest rule to follow when it comes to debt collection is to be honest. You are absolutely not allowed to lie to your delinquent customers. You can’t make up horrible, untrue things that will happen to them if they don’t pay. And, just as you can’t outright lie, you also can’t be intentionally misleading. You must be honest and upfront at all times, and you must not make any kind of threat.
You have a right to contact the debtor and to try and recover your money. You do not have a right, however, to harass him or her. Calling a debtor at work, calling a debtor non-stop, or engaging in certain other illegal practices, which vary by state, is a good way to get your business in serious trouble.
There are other things you shouldn’t do when trying to recover a debt. Don’t:
l Provide private information to an unauthorized third party
l Tell the debtor’s employer that money is owed
l Call the debtor early in the morning or late at night (legal times vary by state)
Though it may be hard, be respectful of the debtor at all times. You’ll stay out of trouble that way, and you’ll have a better chance of recovering your money.