Permissible Collection Agency Practices

Whether you have an internal debt collection department or a collection agency, there are some things that you have to remember when it comes to debt collection.  There are practices to debt collection that are allowed by law and there are those that are simply taboo.

Before you engage in debt collection practices for your collection agency or for your company, you have to familiarize yourself with what is considered to be permissible collection agency practices.  Collection agencies actually inspire fear on an erring debtor and this helps collectors fulfill their job.  But it would not be wise to lose this advantage if the debtor finds cause to sue you instead because of your unfair collection practices.

Your collection agency or your company’s collections department should stay within the acceptable means of contacting your debtors.  You should try to contact your debtors through the post, telephone, telegram or facsimile.  The most popular mode is the telephone.

There are certain rules about contacting your debtors.  There are laws that prohibit collection calls outside of business hours and late at night.  You can only call your debtors from 8 am to 9 pm.  If you call outside these hours, your debtors can complain.  You can call the debtors at their place of work unless it has been explicitly prohibited by your debtors’ employer.  And every time a call is made, it must be kept professional and to the point, without threats and obscene language.

Credit collection agencies’ collectors have been known to contact other people when they cannot find the debtors themselves.  This is an acceptable practice.  However, these calls cannot be for the purpose of passing on the responsibility to uninvolved parties but only to find the whereabouts of the debtors.  You can only contact a third party once and you cannot harass him to reveal what he knows.  You are not also allowed to reveal that you are calling to collect a debt and you certainly cannot reveal the particulars of the debt.

In the course of your collection and information gathering activities, remember that you may never misrepresent yourself.  You must always introduce who you are and must not assume a position that you are not actually holding, like a tax collector or a federal agent.  Just keep to the straight and narrow in your collection activities and you will have no cause to lose money to costly litigations.