Collections Laws, Debt Collection Laws

All collection agencies that do business in the United States of America are regulated by certain collections laws. It is vital to make sure that the collection agency that you select to collect your money abides by these debt collection laws. If they do not, they can create a massive liability for your company. Please note there are other laws, like HIPAA and specific State collections laws that might also apply. Following are two of the major Federal collections laws that regulate collection agencies.

Fair Debt Collection Practices Act (FDCPA)

The Fair Debt Collection Practices Act is mother of all collections laws. It is the Federal law that regulates collection activities for collection agencies, collection attorneys and business attempting to collect a debt "in-house". The Fair Debt Collection Practices Act generally applies to personal, family, and household debts. This might include money owed for the purchase of a car, for personal charge accounts, or for medical treatment. "Debt collectors" are prohibited from engaging in unfair, deceptive, or abusive practices while collecting these types of debts.

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The Fair Credit Reporting Act (FCRA)

The Fair Credit Reporting Act is another of the major debt collection laws. This is the Federal law that restricts who has access to people's sensitive credit information and what uses can be made of it.

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Please note that is imperative that your collection agency follows all applicable debt collection laws, because if they do not follow the debt collection laws, it could crate a legal liability for your company.