Feb 04, 2013 Philip Burgess
As a direct result of the financial crisis, corporations and individuals in the United States borrowed more money than ever before throughout the past several years, as the number of outstanding loans continues to rise. However, the more recent improvements in overall economic conditions, such as a decreasing unemployment rate and improving consumer spending, have led to increases in debt collection activity.
Professionals in this industry, as well as companies that need to seek out and retrieve outstanding debts from individuals or other businesses, need to follow a variety of laws to ensure legal and successful collections. Failure to do so could result in serious fines, hurt reputations and even loss of dues owed following complaints of abuse that lead to legal proceedings.
Debt collection rising
The Denver Westword News recently reported that debt collection activity will be intense in 2013, as more businesses will begin to partake in the processes out of either necessity or the ability to boost profits. The source explained that the rise in collections has already led to serious problems in Denver, Colorado, for a variety of companies and consumers.
As many of the newer collectors will not meet the requirements of the law, reputations have been on a downward spiral for the industry at large. According to the news provider, small business owners and consumers have cited serious infractions of the Fair Debt Collection Practices Act (FDCPA) in recent months, though this is simply unacceptable considering the clarity of the law.
The source asserted that one issue might be the non-discriminate practices of a few that treat all bounced checks and other debts as criminal activities. Instead of working to separate fraudulent activity from simple human errors, these blanket policies treat all instances the same. This has led to an uptick in legal activities on behalf of law enforcement officials and debt collectors following complaints from businesses that lent the funds.
Finally, the Denver Westword News added that the poor practices of a small number of collectors could lead to more widespread issues. However, following the laws will keep these professionals out of harm's way.
More agencies from federal and state governments are getting involved with oversight of debt collection agencies, representing greater risk for those industry players that are either willfully abusive or do not understand the laws. By outsourcing tasks to a reliable debt collections firm, businesses can better defend against the potential for hurt reputations, lost money and legal headaches.