Adhering to collection agencies laws

Written by: Jean Marquit

There are collection agencies laws which must be followed by collectors so they don’t risk facing legal action. Indeed, there are protections for the consumer against harassment and intimidation, which some collectors used to employ to collect funds but is now illegal. It’s important to be aware of collection agency rights and laws and choose a company that abides by the rules and regulations set forth by federal and local jurisdictions.

Basic collection agencies laws

Here’s what a collection agency has the right to do: they can contact debtors, ask for payment, and tell them that they’re behind in their accounts. Additionally, while it’s allowable for collection agencies to contact you at work, they must cease immediately if their supervisor requests you stop.

However, there are some restrictions that a collection agency must work under:

• Collection agencies can only contact the debtor by phone between the hours of 8 a.m. and 9 p.m.
• A collection agency can’t harass the debtor.
• If the debtor makes a written request for the collector to not contact him or her, the agency must comply. However, the collector is still allowed to mail monthly statements on the account and contact the debtor about any court actions.
• The bill collector can’t imply that a crime has been committed or that the debtor will be arrested for nonpayment.
• The collector must be honest with the debtor about why they are calling and what their responsibilities are.

Consumers and debtors also have rights as provided under law. While they’re still responsible for making payment on past due accounts, they maintain the right to protect themselves against threatening and harassing behavior.

Can a collection agency sue for a debt?

Whether or not a collector can sue depends on who owns the debt. If the collection agency doesn’t own the debt outright, and is only paid a fee by a company to recover the money, then the agency can’t sue. It’s up to the creditor to decide if he wants to take the debtor to court.

In some cases, a debt collection agency actually purchases the debt from the creditor. This way, the agency owns the debt and can then sue. Most of the time, however, the effort and expense involved in a lawsuit is not worth it. Unless the debtor owes a great deal of money, it’s unlikely they’ll get sued in court.

When you are comparing collection agencies, it’s important to choose one who will follow the rules and respect debtors' rights. Ensure you work with only professional, law-abiding collectors: submit a free request for quotes and get matched to multiple agencies at once.