Collections Agency Regulations
Collection agencies collect debt that is owed to them or to someone else they are in the employ of. Financial institutions and other types of businesses and organizations hire collectors to obtain monies owed on existing debt. To remain in good standing, agencies must adhere to regulations established by the Federal Trade Commission.
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Identification
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As a debt collector you are required to identify yourself at the start of the conversation. If you speak with someone other than the consumer you seek to collect outstanding debt from, you are only permitted to ask the third party to validate the consumer's location. For example, you could ask if the consumer still lived at 123 Main Street. You cannot state that the call is regarding outstanding debt.
Correspondence and Consumer Communication Rules
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Debt collectors must not send post cards to communicate about debt. Sealed envelopes must not show language or symbols that reveal that the correspondence is in regard to a debt collection. Calls to consumers should be made to their home of residence after 8 a.m. and before 9 p.m.
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Attorney Contact
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Upon notification from the consumer that they have obtained legal representation and after the consumer has sent the debt collector their attorney's name and contact information, all further contact regarding the outstanding debt shall be made between the collection agency and the consumer's attorney. The only instances when the collection agency can contact the consumer directly are instances when the attorney fails to respond to an inquiry within a reasonable time period.
Harassment
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Collection agencies are prohibited from harassing, abusing or oppressing consumers while they attempt to collect outstanding monies owed on an account. As a debt collector you must not threaten to harm or imprison a consumer. You are prevented from using obscenities while communicating with consumers. You are not allowed to publish consumer names in a public list or advertisement that identifies the consumer as having an outstanding debt. Telephone calls that you make must not be made an unreasonable or excessive number of times so as to become harassing.
False Representation
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As a collection agency you shall not falsify information including telling consumers that you are affiliated with a state or federal government agency. The FTC also prohibits debt collectors from providing incorrect debt amounts owed or from requesting special personal or organizational payments in lieu of the debt. Consumers shall not be threatened with legal action that the agency is unable to take.
Unfair Collection Practices
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Collection agencies are prohibited from accepting payment forms from consumers that are postdated by more than five days without first providing the consumer written consent that the payment will be deposited within one to 10 business days from the date on the instrument. Debt collectors shall not request postdated payment forms in connection with threats of criminal prosecution. Collection agencies are also prevented from depositing postdated payment forms earlier than the date shown on the check. Collect telephone calls and telegram fees are not to be sent from collection agencies to consumers.
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