Debt Collection - The Basics - What are Debt Collection Agencies Allowed To Do?

There have been a lot of stories lately about debt collectors calling people and hassling them into submission. Sadly, many of these stories are true. A lot of companies out there tend to stretch the truth about what they are allowed to do, going beyond the reasonable reach that the system and the FDCPA allows. These sort of companies are reprehensible. The tactics they use only go to damage their name and the name of the industry as a whole.

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.

So then,

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:

1. Where the debtor lives
2. What the debtor’s phone number is
3. Where they work

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?

1. Send them a written notice telling them the amount of money they owe
2. The name of the creditor to whom they owe the money
3. What action to take if they believe they do not owe you the money

What types of debt collection practices are prohibited?

Harassment:
Debt collectors my NOT harass, oppress, or abuse your debtor or any third parties they contact. For example, debt collectors may not:

1. Use threats to violence or harm
2. Publish a list of consumers who refuse to pay their debts (except to a credit bureau)
3. Use obscene or profane language; or repeatedly use the telephone to annoy a debtor
4. Issue false statements in order to coerce the debtor

Debt collectors may not use any false or misleading statements when collecting a debt. For example debt collectors may not:

1. Falsely imply that they are attorneys or government representatives
2. Falsely imply that your debtors have committed a crime
3. Falsely represent that they operate or work or a credit bureau
4. Misrepresent the amount of a debtor’s debt
5. Indicate that papers being sent to a debtor are legal forms when they are not
6. Indicate that paper being sent to a debtor are not legal forms when they are

Debt collectors may not state that:

1. The debtor will be arrested if they do not pay their debt
2. They will seize, garnish, attach or sell the debtor’s property or wages, unless the collection agency or creditor intends to do so, and it is legal to do so
3. Actions, such as a lawsuit, will be taken against the debtor when such action legally many not be taken, or when they do not intend to take such action
4. Give false credit information about your debtor to anyone, including a credit bureau
5. Send your debtors anything that looks like an official document form a court or government agency when it is not
6. Use false names

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.