subject: Reasons Why The Fair Debt Collection Practices Act Is Significant To Your Business [print this page] The Fair Debt Collection Practices Act was brought into being to address problems relating to harassing and threatening behavior by some debt collectors. Collection agencies do, however, benefit from this legislation. By acting in a professional manner when attempting to collect debts, collection agencies can avoid possible penalties.
Those in the business of extending credit have the reasonable expectation of being paid back on time. Whether its a product/service delivered with the understanding to pay upon receipt, or an individual is loaned thousands in unsecured credit card advances, the lender deserves repayment of the debt.
Of course, there will be those instances where the lender is not receiving the payments he or she is due. There can be many reasons for this. Sometimes, the individual borrower needs a little more time to navigate out of a bad financial situation. In other instances, the borrower is simply negligent and defaults. Regardless of the reason, it is within the rights for the lender to seek payment.
This is the area where collection agencies become important. Their goal is to get the payments due their clients. They cannot, however, act recklessly in attempting to collect these debts. This is where the Fair Debt Collection Practices Act comes into play.
The FDCPA was first enacted in 1978. Since then there have been amendments added and modifications to the Act that have altered the law in some ways. For instance, an added clause to The FDCPA states that a borrower in collections can request that the collection agency cease contact with him/her, and the collections rep must cease further contact.
Keep in mind this does not prevent them from pursuing a valid debt. They can still inform the debtor of their plans to pursue the debt through other legal means, namely through an attorney.
This can only occur if the debtor makes this request in writing. If communication has stopped because the recovery agency can't reach the debtor, then it is legal to contact third parties in a courteous, non-harassing manner. In addition, the recovery rep cannot disclose the nature of the call, so as not to violate the privacy rights of the debtor. While these rules can seem skewed towards the debtor in question, they also help the collection company steer clear of trouble by engaging in unprofessional conduct.
As these laws demonstrate, the intent of The FDCPA is to eliminate abusive and unprofessional behavior on the part of some collection firms. Such behavior undermines the reputation of the business. It also makes it difficult to collect revenues. After all, no one wants to deal with abusive and rude collection firms.
Agencies that violate The FDCPA can be penalized in a number of ways, to include legal actions, and up to a revocation of their license. Commonly, fines can be levied against the offending agency. Of course, they are within their rights to appeal these fines.
The Fair Debt Collection Practices Act is both a lengthy law, and can be rather complex. It is posted in its entirety on the Federal Trade Commission's website. Those wishing to explore the entire treatise are invited to do so.
