The creditors generally sell the debt to a collection agency if the debtors default on their payments. Therefore, the debt collection agencies take up the job to collect payment from the debt stricken consumers. There are many consumers who enroll with debt consolidation programs to avoid the harassing and threatening calls from the collection agencies. Here are a few simple things that the debt collection agencies should know before collecting debt so that they can avoid violating FTC law.
Know about the contact rules:
The debt collection agencies should be aware of the ways it should contact the debtors to collect the remaining debt. If they do not abide by the collection rule implemented by the Federal Trade Commission then the debtor can take legal action against the agency. The debt collectors cannot contact the debtors at work place if they are aware that the employer does not approve it. The collection agency can contact the debtor at work if they are allowed to do so. They cannot contact the person before 8 am in the morning and after 9 pm in the evening. The collection agency can correspond with other people only to get the debtor’s contact information. They are not permitted to reveal about debt to a third person.
Collection method the debt collectors should know:
The collection agency should be aware of the limits of action that it can take while collecting debts from the borrowers. According to the Fair Debt Collection Practices Act, the collection agency is prohibited from using abusive language, harassing calls or threats while collecting debt. Collection agency cannot disclose the name of the debtor in any of public list of debtors. The debt cannot be misrepresented by the collection agency in time of collection practices. It is considered to be a punishable offense if the debt collectors state that the debtor owes more money than they actually does.
Things that collection agency can do:
The debt collectors should know what is legally permissible for them while collecting debt from the debtors. The collection agency can contact the consumers through phone or by mail. If the debtors send a certified mail to the collection agency to cease correspondence then the agency has to do so. In case the debtors have legal representative then the debt collectors have to contact the lawyer to convey information to the debtors. The collection agency can file a lawsuit against the debtor if he does not pay the owed amount. In this situation the court can order for wage garnishment to pay off the owed amount. The collection agency can directly contact the debtors if it has evidence that the debtor is legally responsible for the debt.
Therefore, these are a few simple things that the debt collection agency should know before collection debt from the debtors.