Debt Collection Laws

FDCPA= fair debt collection practices act

When you are seeking the repayment of unpaid dues from your customers, sometimes it may feel as if the myriad of debt collection laws are getting in the way. There are different laws designed to protect the rights of the businesses as well as the debtors. Understanding these debt collection laws will enable you to take the right action against the adamant debtors and maintain a strong business cash flow.

Communicating in the right manner with your debtors is of paramount importance. The debtors are protected by a national consumer protection agency that enforces the Fair Debt Collection Practices Act, or FDCPA. This Act prohibits business from abusing any debtor in order to collect the debts. However, this doesn’t mean that the companies cannot collect the unpaid dues, only that they must follow certain protocols during the process.

Many times it become very difficult to contact debtors, as they start ignoring phone calls and avoiding the collection agencies in every way possible. A non-cooperative consumer can be a hard nut to crack, and hence collection agencies sometimes get to “harassing” levels to collect the money. However, this is not the right practice. Even if a business involves a third party for debt collection, the rules laid down by the debt collection laws must be adhered to.

According to the law, the hours in which companies are allowed to contact people owing them money is limited, so calls must be made within that time. You cannot contact debtors before 8 in the morning or after 9 pm. You should also not contact them at work, but in case you do and they ask not to disturb at work, you must abide by it. Thus, the debtors are protected from any kind of ‘abusive’ debt collecting.

If you properly understand and follow the debt collection laws or the collection agency laws, recouping money owed to the business will not be as tough as it seems.