News & Resources

The simple side of debt collection

Oct 20, 2013 Philip Burgess

The simple side of debt collection

More stories continue to surface regarding poor, illegal or immoral debt collection practices, leading to more enforcement activity among state and federal governments. However, professionals in this industry should be able to quickly identify where these other agencies went wrong, and how they could have acted differently to avoid sanctions, fines, tarnished reputations and substantial financial losses.

The simplest component of debt collection should be adherence to the Fair Debt Collection Practices Act (FDCPA), as this federal statute leaves little room for interpretation when it comes to day-to-day communications. Additionally, it is far easier to perform optimally and drive financial growth when going a step beyond the FDCPA, and providing customers and debtors with exceptional service and support.

Where it went wrong

Daily Finance recently reported that one major lawsuit involving a debt collector might be an excellent example of all the things agencies should not do when contacting clientele and trying to acquire payments. For one, the agency in question went above and beyond the simple definition of harassment, essentially bothering debtors through as many communication channels as possible over the course of several years.

According to the news provider, the Federal Trade Commission responded to a variety of complaints by investigating the agency and then bringing it to court. The collection firm used phones, postal mailing, text messages and more to harass debtors, threaten legal action, falsely represent itself and share details about the debt with friends, co-workers and family members.

What's more, the source stated that the agency consistently failed to verify debts, did not acknowledge cease-and-desist letters or any disputes coming from the debtors and never disclosed advisory statements regarding the clients' legal rights. If there were to be a textbook of all the actions debt collectors should only take if they want to undergo investigations and experience significant fines from the federal government, this agency's story would likely make up the bulk.

Stay on target
The majority of collection agencies follow the FDCPA and do not harass debtors, while the minority continues to increase the stigma facing the industry. Agencies should work to fight against this stigma by providing debtors with plenty of support, guidance and patience, always adhering to the law and never failing to respect the rights of the general population.

Successful execution of these objectives is often reliant upon an exceptional staff, meaning agencies should consider delivering long term training programs to their employees.