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.