Sep 04, 2013 Phil Burgess
It seems as though new stories regarding the improper practices of certain debt collectors have been a focal point in the mass media in recent years, while all of this information should be treated as helpful lessons by the average collection agency. The most common - and stinging - instances almost always go directly against the Fair Debt Collection Practices Act (FDCPA), which is simply unacceptable and a sign that the firm has not done its homework.
Agencies that focus on exceptional customer service and comply with all of the requirements under the law can simultaneously avoid problems with regulators and maximize profits. When a firm undergoes an investigation for shoddy practices, it can dramatically hurt its reputation, lead to serious financial losses and other headaches which are often impossible to bounce back from.
Lawsuit for classic complaint
The Southeast Texas Record recently reported that a woman from Denton County, Michelle Morrison, is pushing litigation proceedings against a debt collection firm after the agency allegedly violated the FDCPA. According to the news provider, the plaintiff is asserting that the agency caused her mental distress after threatening to seize assets without any legal foundation to do so.
Morrison believes that the agency actually made the threats to simply bother her and coerce her into paying off the debt and, if these allegations are true, the firm will be facing substantial fines and other financial losses since these practices are against the FDCPA as well as the Texas Fair Debt Collection Practices Act.
This story also highlights the importance of knowing the state and local laws of debt collection, as certain municipalities will have additional stringent compliance requirements to protect consumers and businesses.
The source added that Morrison wants the agency to pay for several damages, both statutory and actual, as well as other fees and charges.
FDCPA should be covered
Most debt collections that get into this type of trouble are those that have either not trained all employees in the FDCPA, or are simply disregarding the law. Since the Consumer Financial Protection Bureau and Federal Trade Commission have increased efforts to enforce the laws and bring illegal practices to justice, all agencies should be more focused upon conducting fair and legal collections going forward.
Businesses or lenders that do not feel completely comfortable with the law should consider outsourcing the collection process to an agency with a proven track record.