Debt collection is an even bigger concern than ever now that the economy has taken such a downturn.
Greater numbers of businesses are in financial trouble and face bankruptcy and need a Debt collection service.
Companies that are unable to get invoices paid need to hire a collection agency in order to collect on their outstanding bills. However, regardless of the need for debt collectors in today’s business sector there are regulations that need to be followed so that debt collection agencies follow fair practices. As it is there are too many debt collection agencies that do not follow fair practices and end up with negative reputations.
The Fair Debt Collection Practices Act is a piece of legislation that governs the way debt collectors should behave. Under the Act no collection agency is allowed to harass, intimidate or otherwise negatively impact the person from whom they are trying to collect. They are also not allowed to practice abusive or deceptive methods for obtaining information about the person. Therefore, debt collectors are not allowed to phone the debtor’s friends, colleagues or boss and state that the individual in question owes money. They are not allowed to continuously call their friends, colleagues or boss to find out where to find the person in question, unless the collector believes that they did not receive the correct information the first time.
Debt collectors can only contact the individual with an outstanding debt between the hours of 8am and 9pm. They are not allowed to contact an individual if that person is represented by an attorney. They are not allowed to publish that person’s name or address on a “bad debt” list. No collection agency is allowed to continuously call a person with the intent to annoy that individual. They are also not allowed to employ any means of communication that can identify to others that the individual in question owes money. Collectors are also not allowed to misrepresent themselves in order to collect on a debt, for instance, they cannot say that they are an attorney or a legal representative if they are not.
Debt collection is a necessity but you must be careful when hiring a collection agency. You do not want your business’ name to get sullied by the practices of unscrupulous debt collectors. Finding out as much as you can about the collectors on your short list is the only way to ensure that you are hiring a collection agency that follows the fair practices Act.
If you are on the market for debt collection then you should know that you will probably only get a portion of the outstanding debt owed to you. What generally tends to happen when dealing with debt collectors is that you “sell” your debt to the collector for a portion of the outstanding invoice. The debt collection agency then takes it upon their shoulders to collect on the full invoice. If they are unable to collect the full cost of the invoice, then they lose money. It is one of the main reasons that debt collectors might resort to unfair practices, which is why you must be careful about the debt collectors you hire.