Do Not Become A Debt Collection Agent To Collect Business Debts

Do Not Become A Debt Collection Agent To Collect Business Debts
August 10 09:31 2016 Print This Article

When you have delinquent customers to your business, you may want to hand the collection process and headache to a collection agency and get the job done as soon as possible. But the collection agency cannot take any unfair means and step to get the money out from the debtors as there are specific laws and regulations to protect the rights of both the debtor as well as the creditor. There are even laws to regulate and control the actions of the collection agency that at no point in time can threaten a debtor for dire consequences and not even ask or request the court to issue an arrest warrant for non-payment.

Debt Collection Laws

The rules and regulations for debt collection can be imposed on you under three specific scenarios wherein you have to act and follow as per the rule of the state which may vary from state to state and country to country, but the basic acknowledgment remains the same worldwide. When you are acting like a debt collection agency to get your due back from your debtors, the law may exempt you, but when you are implementing certain collection tactics that are specifically implemented by any debt collecting agency, then you would require complying with the rules of it. Image result for Do Not Become A Debt Collection Agent To Collect Business Debts 

No Use Of Third Parties

It is fine when you try to collect your dues from the customers on your own but as soon as you use the name of any third party or any collection agency you would trigger the rules laid down by the government and make yourself accountable. You cannot even use any other name during collection apart from your company or personal name or be ready to face the law. There should not be any mention of any third party name in the reminder letter and should not use any third party for dunning the management of it. Dunning is a communicating service which several small business companies outsource, but this is also prohibited by the law.

Law Of The State

Some exceptional states go beyond the guidelines of fair practice act and enforce any creditors collecting dues on their behalf as a debt collecting agency as well. If you reside or your business is in such a state then under all circumstances you would fall under the debt collection agency category no matter what. You can check online to know the names of such states and also about the latest updates regarding such laws so that you can avoid any unnecessary and unwanted surprises.   

Do Not Get Identified

If you get identified as debt collection agency by the CFPB who have a tremendous flexibility and power in determining and drawing companies under its regulatory authority, it can enforce collection laws onto you. Once you are identified, then the authority would suggest about the fair and unfair practices. Lastly, remember to play safe always by calling at reasonable time of the day, not add additional fees and interest, not delay posting of payment, not confiscate any asset, not talk about it to the employer of the debtor, not lie and pretend to be someone else, and not threaten of dire consequences.

People who are involved in debt issues can now check out for the best debt consolidation loans which will not just give them a sign a relief but will make their life easy. Learn about it online and go for it without thinking much.

 

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Alec Harris
Alec Harris

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