News & Resources

Debt collectors need to avoid harassing language

Sep 19, 2013 Phil Burgess

The vast majority of complaints directed at the debt collection industry relate to the communications employees make with their clientele. The Federal Trade Commission, as well as the Consumer Financial Protection Bureau and countless state law enforcement agencies have been increasing efforts to identify and shut down collection operations that are violating the Fair Debt Collection Practices Act (FDCPA).

It is not hard to follow the statutes of the FDCPA, and it seems as though most of the agencies which are in violation of the law are simply disregarding it, or running fraudulent operations. Collectors need to ensure that all employees are well-versed to avoid the potential for financial losses, damaged reputations, fines and sanctions.

Wisconsin speaks
The Wisconsin Department of Financial Institutions has reached out to the state's consumers warning about harassing calls from debt collectors. State officials have witnessed an increase in the amount of complaints coming from its residents, as well as businesses, and as such are working to raise awareness related to the FDCPA.

Harassment and other unethical strategies to try to obtain a debt are very clearly illegal. One of the more specific types of poor communications that the state is targeting is threatening language that suggests that arrests or jail time will follow should the account not be reconciled immediately.

The Wisconsin Department of Financial Institutions urged residents who experience these types of issues to speak up and report the agencies to state's officials. One of the bigger reasons for increased action is the belief among officials that many of these collectors who are breaking the law are actually identity thieves or other threatening, fraudulent parties.

"In many cases, we suspect that consumers may have applied for or obtained loans on the Internet or, at the very least, may have entered their personal information into an Internet application," Paul Egide, Director of the Bureau of Consumer Affairs, explained. "That information is then fraudulently obtained by the perpetrators, who target consumers for collection of debt the consumers do not owe, or at least do not owe the debt to the company that is calling."

Don't be the next to fall
Collection agencies can avoid many headaches and even enjoy more successful operations by simply ensuring that all policies are aligned with federal and state laws regarding communications. Training needs to be a focal point, especially for newer staff members who have not yet worked in the industry for several years.

The FDCPA certainly has several complexities, but the statutes related to communications that all staff members need to know are fairly intuitive and easy to teach. This process should not just be about avoiding fines and sanctions, but rather a broader effort to maximize the performance of the company.

Debt collectors who focus on the most superior customer service will often enjoy stronger financial performances over the years, especially as they will be more likely to efficiently reconcile accounts and get more business from debtors.