Rules & Regulations for Collection Agencies
A collection agency is a business that pursues payments on debts owed to businesses or individuals. The collection agencies act as creditors and collect a percentage of the debt owed to the original creditor. The collection agency has the legal right to collect on any debt the agency has acquired, but there are regulations to how, when and where a collection agency may collect.
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Collection Agencies
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A collection agency must notify the debtor that they are collecting on a debt. The debtor must be made aware that any information the collector obtains will be used for that purpose. Before proceeding, the collector must verify that he is speaking with the debtor, her spouse or any authorized guardian and account member. If the debtor or authorized individual is not available, the collector must cease attempting to collect and leave a contact number.
Times and Places
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Collection agencies may attempt to collect on a debt every day of the week. However, the times at which a collection agency may call debtors are limited, as are the potential locations. All collection-agency calls must occur between the hours of 8 a.m. and 9 p.m. in the debtor's time zone. Calling a debtor at work may not be prohibited if the debtor is not allowed to receive calls to her job.
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Contacting References
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The references that were listed when the debtor applied for the credit or loan may contacted if the collection agency is unable to locate the debtor. The collection agency may not discuss the debt with any other party except the debtor. When contacting references or neighbors, the collection agency can only leave a message with a contact phone number and a reference number for the collection case. The collection agency may also ask the reference for an alternate number or address of the debtor.
Threats and Abusive Language
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The collection agency may at no time threaten to harm the debtor. Collection agencies may not abuse, oppress or harass debtors. Using obscene and profane language is against collection-agency regulations. Collection agencies can not intimidate debtors by stating that the debtor will be arrested if he refuses to pay the debt, because this statement is false. Also, the collector must be truthful in stating her name and company affiliation; collectors may not pretend to be attorneys or government officials.
Bankruptcy
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If a debtor has filed for bankruptcy and listed the creditor on his claim, the creditor must cease all attempts to collect the debt until a judgment has been made. The creditor may challenge the claim the debtor has made concerning monies owed. If the debt is not discharged or listed in the bankruptcy petition, collection agencies may still proceed with collecting the debt. In all bankruptcy cases except for Chapter 13, collection agencies may continue collecting debts from any third parties that have not filed bankruptcy with the primary debtor.
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