Individuals, Companies, The FDCPA and Collections
Potential new clients frequently ask us about the Fair Debt Collection Practices Act (FDCPA) and whether or not we conform to its rules and regulations.
Interestingly, The FDCPA does not apply to commercial collection agencies. The FDCPA was enacted to protect individual consumers from unfair and harassing collection practices. The law has been around since the 1970s, and many businesses assume that it applies to them as well. In reality, there are no federal laws that govern third-party commercial collection practices. Instead, state laws govern commercial collections practices. Many professional associations also require that their members conform to certain standards and practices.
Today very few companies conduct business in just one state. But since state laws can vary widely, it’s important to make sure you hire a collection agency with nation-wide experience. Collecting across state lines when you are not familiar with the individual state’s laws could leave you open to legal action.
If you are an individual who owes money, you are covered by The FDCPA, but it’s important to remember that The FDCPA does not apply to people attempting to collect on a personal debt. So, if a business is attempting to directly collect on a debt you owe, they are not bound by The FDCPA.
However, if the business has hired a collection agency, then that collection agency is bound by The FDCPA. Some provisions of The FDCPA include:
- Debt collectors can only call between 8:00 am and 9:00 pm (unless you have agreed to other times).
- If you tell a debt collector either verbally, or in writing, not to call you at work, he or she must stop calling you at work. A request to stop contacting you at your home must be in writing.
- Debt collectors can only call friends, relatives, or neighbors once, and cannot give out any information about your debt.
- It is illegal for debt collectors to harass, physically threaten you, threaten you with arrest, or even threaten to sue you, unless they are actually planning to sue you.
Although at Kaplan Group we do not work with individual collections, we are always happy to help people out with information and to hold our fellow debt collectors to the highest standards. If you have questions about personal debt collection, please visit our new website section on the subject.
As a commercial collection agency we are not bound by The FDCPA, but we take our responsibility to protect the reputation of our clients seriously and always hold ourselves to high ethical standards and practices. We look forward to helping you with your debt collection needs.
About The Author:
Dean Kaplan is Principal at The Kaplan Group. Dean's expertise is widely recognized in the debt collection industry. His advice has been published in a number of industry newsletters such as Credit Today and InsideARM and he is a frequent speaker at industry events.