Are You Following FDCPA Policies?

Why should you hire a collection agency that follows Fair Debt Collection Practices Act (FDCPA) guidelines to recover your consumer debts?

The short answer is, legally speaking, you have to.

A more detailed answer would also include how the kind of agency you hire is a direct reflection of how you conduct your own business, how consumers are not shy to complain when an agency (or any type of business, for that matter) is treating them unacceptable, and how, in extreme cases, your business can be sued for using the services of an unscrupulous collection agency (even if you’re not aware of their actions).

So, unless you want to risk litigation against your company or don’t want to maintain relationships with your consumers, then you should heed our advice to hire a reputable agency. A FDCPA-compliant collection agency will ensure your consumer debts are collected effectively, respectfully, and (most importantly) lawfully. But what exactly makes a collection agency FDCPA compliant? What the FDCPA

What the FDCPA is:

The FDCPA was prepared as a public service by the Federal Trade Commission (FTC). Its purpose is to protect consumers from harassing, unfair, and invalid debt collectors, stating that “Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy” (§ 802). Since 1978, the Act has provided policies for when and where the consumer can be contacted by a collector as well as prohibits abusive and harassing behaviors by the collector.

What Collectors Can Do:

What Collectors Can’t Do:

As you can see, the list of what collection agencies can and cannot do is exhaustive. We have intended our list above to be an overview and is not a definitive catalog of policies. For specifics, please refer to the FDCPA.

What Consumers Are Filing Complaints About:

Now that you are aware of what actions collection agencies are able to practice in order to recover a consumer debt, you may be wondering what the consumers have to say.

In 2016 alone, 3,433 consumers filed complaints with the Consumer Financial Protection Bureau (CFPB) regarding debt collectors and about 1,191 consumers filed lawsuits, according to WebRecon.

Of those complaints, the largest percentage was related to debts categorized as “other” (such as phone or health club debts) at 36%. Medical debts came in second at 20%. The next highest percentage (at 17%) were complaints regarding debts that consumers didn’t know what type of debt it was. Credit card debt came in next at 15% and the remaining 12% of complaints pertained to payday loans, auto, mortgage, or student loans.

However, what’s most useful here is the breakdown of what the actual complaints were:

These statistics go to show that consumers are complaining precisely about what the FDCPA is in place to prohibit.

What This Means for Your Business:

Although the Act was established to protect consumers from unscrupulous debt collectors, it can also protect your business.

According to the CFPB’s 2016 annual report, many consumers are not aware that they even have debts in collections until they are contacted by a debt collector or review their credit reports. Hiring a professional but firm and determined collection agency will help you maintain relationships with your consumers. Do not burn bridges with your customers by hiring a collection agency that is forceful and intimidating.

As evidenced above, consumers will complain if they feel that a collection agency is using abusive, harassing, or unfair methods to collect a debt. If you are concerned about negative publicity of your company (such as complaints on BBB, Yelp, Facebook, etc.), then you want to make sure the collection agency that is acting on your behalf is following best practices, such as following FDCPA policies.

360Connect can help you hire a reputable collection agency. Just fill out our form and we will connect you with up to five agencies in your region. It’s that simple.

Ready to get a Collection Agencies quote?