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Consumer protection highlights need for debt collection compliance

Jun 10, 2013 Philip Burgess

Consumer protection highlights need for debt collection compliance

The Fair Debt Collection Practices Act (FDCPA) protects consumer interest against abusive or illegal debt collection methods. A recent article from noted how debtors can fight debt collectors that use unlawful strategies. Although it is important for the general public to be aware of these regulations, it's even more necessary for debt collection agencies to understand the laws.

As the source notes, there are practices that are deemed illegal for debt collectors, even if an outstanding debt is owed by a consumer.

Contacting outside parties

One of the more innocuous conditions of the legislation outlines who can be contacted regarding debt accounts. According to the source, debt collectors can talk to the party with an outstanding account or their attorney to discuss the owed amount. Any other person or group that is contacted regarding another party's debt can not be provided with information regarding the outstanding payment. Collectors are only allowed to ask where the other person lives, where they work and what their phone number is. This can be an easy trap for collection agencies to fall into, as one simple question or statement could deem a particular debt collection process as being conducted in an illegal manner.

Too many calls
Another common misstep that some collectors can make without intent of malice, is rapid or constant calling. According to the Federal Trade Commission, which enforces the FDCPA, repeated calling can be labeled as harassment or abuse. Although some employees at debt collection agencies may simply be doing their jobs, making too many phone calls to a particular debtor can land them in hot water. To avoid these situations, workers should maintain a log of parties they call and when they last contacted them.

Proper disclosure
Failing to disclose the purpose of a debt collection call or letter is also illegal. Upon initially reaching out to an in-debt party, collectors must immediately explain why they are doing so: to close an outstanding debt. Also, they must notify they person or group that all information they obtain during calls will be used for the purpose of closing an account.

Getting into the right habits is important for any debt collector. Making a simple mistake can negate successful attempts to close outstanding debts.