Debt collection agencies and the businesses and
professionals who use them are subject to many rules and regulations about how
they must treat debtors. When debt collection agencies overstep their
boundaries or disobey the law, they can be penalized through litigation, formal
complaints, and the like, all of which are bad for the companies they
represent. That’s why it’s so important for all businesses that choose to work
with a collection agency to choose the most reputable, quality one they can
find. Good collection agencies know and follow all the regulations that are
currently in place, check and double check their workers for compliance with
these regulations, and always treat even the most serious debtors with respect.
Picking the right collection agency, one that abides by all
required regulations, isn’t so easy if you don’t know what the regulations are.
While there are all kinds of laws and rules that affect the debt collection
industry, a few of the more important include:
The Fair Debt Collection Practices Act
The laws established by this act dictate when, how, and how
often debt collectors can try to connect with debtors. The laws also dictate
what information can be revealed through communication, what information
(disclosures) must be revealed, and the manner in which the call and the
person on the other end of it needs to be handled.
The Fair Credit Reporting Act
This act created laws surrounding the sensitive information
that is often revealed in debt collecting. This act determines when debts can
be reported to the big credit bureaus and how credit will be affected, but it
also deals with how to keep sensitive, private information sensitive and
private.
The Telephone Consumer Protection Act
Finally, the telephone consumer protection act determines
how debt-related phone calls must be made and handled. Laws created by this act
dictate that the nature of collection calls must be reported prior to the start
of the conversation, for example.
The laws and acts discussed here, and others like them, were
all designed to protect the debtor. There really aren’t a lot of laws in place
to protect businesses or collection agencies. That’s why the two have to stick
together and why businesses must be selective about the collection agencies
they choose to work with.
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