Feb 26, 2013 Philip Burgess
Debt collection agencies continue to come under increased scrutiny, as the industry's activities intensify in accordance with higher outstanding credit volumes than ever before. With more stringent legislation and enforcement protocols coming from federal and state entities, agencies should take the time to adjust their policies and fight against the growing stigma facing the collections industry.
NBC Connecticut recently reported that fraudulent debt collectors have become more commonplace in the state, especially as residents have struggled to repay loans because of difficult economic conditions. According to the news provider, complaints regarding fraudulent or abusive debt collection practices have largely centered around the communications coming from agencies.
The source explained that the state's Department of Banking and Attorney General fielded more than 300 complaints from residents last year, and as such decoded to increase enforcement efforts and crack down on abusive collection practices. Connecticut is one of many states that have taken the initiative to improve the debt collection process for both agencies and consumers in recent years.
NBC Connecticut added that agencies need to follow the guidelines as outlined by the Federal Trade Commission, as well as the Consumer Financial Protection Bureau and state regulations to avoid crippling sanctions and fines. The news provider added hat the state is now working to shut down fraudulent and abusive collection agencies, as Connecticut licenses 900 firms currently.
Any firm that is unsure of their debt collection practices and whether or not they are aligned with federal and state regulations should consider outsourcing the responsibility to a firm that specializes in the activities. Fines and sanctions can lead to serious repercussions, including a loss of the value of the outstanding debt and forced closures.
By maintaining compliance with federal and state statutes, debt collection agencies can break the stigma facing the industry.