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Complexities of the FDCPA mean officials should support debt collector education

Jan 07, 2014 Philip Burgess

Debt collection is one of the most vital practices regarding economic stability in the United States. Many organizations that employ a fair portion of the American public use collection services to recover outstanding debts that would otherwise hurt their cash flow, stunting growth for many companies and, ultimately, the country.

Despite the importance of the industry, many financial regulators across the country target the sector instead of supporting it. For example, state officials in Wisconsin recently took steps to inform residents about what debt collectors are not allowed to do under the Fair Debt Collection Practices Act (FDCPA) and state laws, according to WSAU-TV. The move comes in the wake of a series of robocalls that took place across Wisconsin earlier in December, the source noted.

Although educating consumers is hardly a negative thing, financial officials should also take the necessary steps to support instruction for debt collection agencies and their employees. The FDCPA is an incredibly complex set of regulations that can be difficult for even the most legally savvy individuals to understand.

Collection agents need education
The FDCPA includes specific stipulations that outline when collection agents can contact borrowers, how they must identify themselves and a host of other extremely detailed regulations. Include the fact that many states also have equally complicated laws to augment the FDCPA, and it's clear why a comprehensive education plan is need to ensure agents follow all applicable rules.

With such a challenging legal landscape, it can be easy for a collection agent to step out of line on occasion. Despite the majority of enterprises within the sector that follow the FDCPA, a handful of outlets do indeed circumvent the law, often without intent. This has created a negative perception of collection services among many elected officials.

Just recently, several debt collection firms were sued by the Colorado Attorney General for alleged collection errors, according The Denver Post. Even if these allegations involve serious or intentional illegal acts, it highlights something very important: Debt services only make the news when something negative occurs.

Instead of only noticing the bad apples in the industry, regulators need to also focus on the debt relief enterprises that are well intentioned. By creating state or federally sponsored educational programs that help collectors gain a better understanding of the FDCPA, officials can take positive steps to improve the sector. Doing so will not only help collection companies, it will help the various businesses that rely on relief firms to close outstanding debt accounts.