The Fair Debt Collection Practices Act has proven to be very useful to people in need of reducing problems associated with harassing debt collectors. And, yes, it also has many benefits for the collection agencies as well. Through the enactment of sensible laws, the Fair Debt Collection Practices Act compels collection representatives to act in a professional manner that will ultimately benefit them as well.
Those that are in the business of extending credit have a reasonable expectation of being paid back. Whether a product is delivered with the agreement to pay upon receipt or an individual is issued tens of thousands of dollars in unsecured credit card cash advances, the lender is entitled to being paid back.
For sure, there are instances when the lender is not getting the payments he/she is due. There can be a number of reasons for this. Sometimes, the borrower needs more time to wiggle out of bad financial circumstances. At other times, they can simply be negligent and default on their obligation. Regardless of the reason, the lender is within their rights to seek payment.
This is the place where collection agencies become very important. Their aim is to collect the monies doe their clients. However, they cannot act in a reckless manner in attempting to collect these past due accounts. Here is where the Fair Debt Collection Practices Act comes into play.
The Fair Debt Collection Practices Act was enacted in 1978. There have been added amendments and modifications to the Act that have altered it in some ways. For example, a new clause to The Fair Debt Collection Practices Act states that a debtor in collections can request the collection agency to cease further contact with him/her, and the collections rep must comply with this request.
Consider though, that this does not prevent the collection agency from pursuing a valid debt. Collection agencies are still within their rights to inform the debtor of their intention to pursue the debt via other legal channels, namely through an attorney.
This can only occur if the debtor makes this request in writing. If communication has stopped because the collection agency can't reach the debtor, then it is legal to contact third parties in a courteous, non-harassing manner. In addition, the collections rep cannot disclose the nature of the call, so as not to violate the privacy rights of the debtor. While these rules can seem skewed towards the debtor in question, they also help the collection agency steer clear of trouble by engaging in unprofessional conduct.
As these rules and laws clearly demonstrate, the purpose of the Fair Debt Collection Practices Act is to eliminate unprofessional and abusive behavior on the part of some collection agencies. Such behavior undermines the credibility of the business and also makes it difficult to collect revenues. After all, who wants to deal with collection agencies that are abusive?
Collection agencies that violate The Fair Debt Collection Practices Act can be penalized in a number of ways, to include legal actions, and up to a revocation of their license. Commonly, fines can be levied against the offending agency. Of course, they are within their rights to appeal these fines.
The Fair Debt Collection Practices Act is both lengthy, and can be somewhat complex. Thankfully, it is posted in its entirety on the Federal Trade Commission's website.
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