Sep 24, 2010 Kyle Duncan
The debt collection industry in the US has grown from small local businesses to large companies with nationwide reach. As the industry has, it has become more regulated with the implementation of the Fair Debt Collection Practices Act of 1977. The FDCPA imposes certain rules and guidelines for debt collection and violations of the Act are enforced through the Federal Trade Commission (FTC). Most states also regulate debt collection agencies through state licensing, registration and certification. One common issue that plagues many collection agencies are the recurring harassment claims from consumers who say they are victims of mistaken identity. Since many people are always on the move, changing addresses, cell phone numbers, and places of employment, it's not unusual for a debt collector to track someone down only to find out they do not have the debtor. This ultimately may lead to lawsuits coming from the victims of such actions.
In order to avoid this type of situation, debt collection agencies must not fail to update their customers' payment records. Having access to Social Security number validation, Death Master File verification, identification of high risk, vacant, commercial, mail drop and other types of addresses and credit bureau header files will add to the accuracy and success of your debt collection efforts. Debt collectors should use credit bureau reporting as a debt recovery and credit collection tool in accordance with federal statutes and client guidelines. Also they should use various skip tracing methods and electronic databases to find current contact information for debt recovery and credit collections accounts having inaccurate addresses and telephone numbers. It's also important to search numerous databases to see if the information about a customer exists, and get updated demographics of customers. Access to national databases for address information, and customized collection methods will help mitigate the possibility of mistaken identity when pursuing delinquent accounts.