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There are a few things more annoying for a company than lending money to a customer who doesn’t pay it back. To get back the money is the one of the challenging parts for companies, and this is the reason debt collection agencies come to play a part in the process. It is a difficult process because if you are lenient, you will most likely fall into the prey of debtors; if you are strict, you might not get as much as customers like your competitors. So, in a way lending money is a necessary evil and companies can’t help but to seek help from debt collection agencies. A renowned debt collection agency receives large numbers of cases annually. Most of them they sort it well, a few either take long to recover or mire in legal battles because of aggressive procedures from collection agencies. As debt collections is on a high rise, especially in the big companies, hundreds of thousands consumer complaints federal and state government agencies get annually. The government authorities are now more focused on cracking down illegal debt collection practices and shutting down those companies who take illegal or aggressive way to collect debts. Acting like business Debt Collection Company If you collect your own debt, it is not a problem. However, the FDCPA (Fair Debt Collection Practices Act) use legal action against companies who use illegal tactics for collecting debts. There are certain laws prescribed by the agency that need to be complied with. The debt collection agency should use the company’s when trying to collect business debts. Also, using a third party dunning management for debt collection, it would be a problem. Dunning is a procedure to methodically communicating with clients to ensure collections. Many small companies are involved in this type of communication, which means gentle reminders through emails and gradually become more aggressive. Being recognized by the Consumer Financial Protection Bureau (CFPB) as a business debt collection agency The CFPB has immense force and adaptability in figuring out which sorts of organizations are liable to its regulations. Any organization esteemed by the CFPB to be a "bigger member" in the fund division can be managed by it. Once this happens, the CFPB can characterize what it considers to be "out of line, tricky or damaging acts or practices" and prohibit them. While in most cases small businesses will not under the purview of CFPB regulations, it might possible the agency you hire could be one of them. As of late, the CFPB began taking action against organizations that take credit card payment on the behalf of debt collection agencies, which are not regulated and non-compliant with CFPB. Play it safe Some of the things you can’t do are: • Call debtors at unreasonable hours • Adding interest or fees that weren’t not in the original document • Seize properties without legal authority • Disclose the debt documents to debtors’ employees or co-workers • You can’t act like a lawyer or government authority • Make it straight to the debtors, and not just lie about credit bureaus and other threats • You can’t threat the debtor with sue or having them arrested for non-payment About the Author Erle Roth is a financial advisor for different debt collection agencies, working for last 15 years in this field. He has an extensive knowledge about business debt collection, money laundering, small business taxation and others.
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