February 3, 2011
Learn About How These Debt Collection Laws Affect Recovering Your Business Debt Effectively
As it concerns trying to recover past due accounts from your debtors, they myriad of debt collection laws can, at times, feel like a stumbling block. Certainly, your primary goal is persuading as many delinquent customers as possible to pay their debts, and help keep your business’ cash flow strong.
Reaching Your Customers – Do you know what the parameters are when it comes to trying to contact your customers? The Fair Debt Collection Practices Act regulates and protects debtors from certain kinds of communications from creditors.
Basically this means that the hours in which you’re allowed to contact debtors are limited, so you need to be sure you make your calls during the allowed times. You may also find that there are strictures placed on where you’re able to contact customers regarding payment of their outstanding debts.
When contacting a third party to try and reach the debtor, you’re also restricted in only asking the third party for information about reaching the actual debtor.
Disputes About Debt Ownership – There may be situations when a debtor may deny owning the debt in question, or that they owe you any money. When this happens, you will need to provide written verification and proof of the alleged debt.
Accurate and Truthful Information – It is imperative that you provide your debtor with accurate information. For instance, it is against the law for you to threaten or insinuate that you’ll have debtors arrested. You also can’t falsely represent that you have legal representation, when in fact, you do not. Nor can you imply that you have some governmental entity chasing after them.
You’re allowed to give only accurate information concerning the debt, and all of your collection strategies must be in accordance of debt collection agency laws at all times. Should you violate these laws, you could be sued by your debtor(s). They could also collect up to 1 percent of the collector’s net worth.
It is very important that your business clearly understand the debt collection laws as related to your collection methods. Collection agency laws extend beyond simply getting customers to pay their delinquent debts.
You need to also learn how changes to the Fair Debt Collection Act relates to customer access to credit reporting information. If a customer wishes to verify the information contained in their credit report, you need to make sure the information you provide is clear and accurate. If you violate these laws, business owners can be subject to fines, as well as having the debt owed to them discharged, in some instances.
Debt collection is a difficult process, but as long as you stay abreast of the debt collection laws, collection agency laws and how these determine the actions you can take legally to recover the money owed to you, then you may find it not as difficult as it might sound.
Knowing what actions you can take legally will also help you to create successful debt collection strategies, whereby you’re able to communicate with your debtor properly and collect the debts owed to you.
David P. Montana has been a distinguished enterprise authority, business adviser and also writer when it comes to collection agencies providers for 30 years. He provides even more beneficial guidelines and info about debt collection laws.
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