Debt collection agencies play an integral role in obtaining past due financial obligations from consumers. These third-party companies are most often hired by businesses to collect late payments on their behalf. As agencies fulfill their duties, FDCPA compliance is a must within the industry.
The FDCPA (Fair Debt Collection Practices Act) protects consumers from unfair, deceptive, and abusive debt collection practices. Violating this Act can come with severe punishments! As such, FDCPA compliance plays a critical role in the success of an agency. Feeling overwhelmed? No need!! Below are some simple tools your agency can implement to remain compliant:
As a debt collection agency, are you aware a consumer can sue your business for violating FDCPA regulations? Penalties include all damages suffered by the consumer due to violations. This includes legal and attorney fees and potentially hefty punitive damages ranging from $1,000 to $500,000.
The key to avoiding penalties is to ensure you are training employees correctly out of the gate. A simple slip-up could, unfortunately, cost your business thousands of dollars. Sure the cost of training may be expensive, but it means your agency will operate successfully and within compliance parameters.
Be Professional & Courteous
According to the FDCPA, irrespective of the nature of the debt, a consumer should not be contacted during unusual time frames. Calls from the agency should only be made between 8.00 am and 9.00 pm. Also, the Act prevents the agencies from attempting to collect a debt at the consumer’s place of work if the workplace prohibits such activity.
On behalf of agencies, the FDCPA establishes stringent professionalism when it comes to debt collection. The above examples ensure harassment avoids a consumer. This may seem frustrating to an agency attempting to contact an individual. But it is important to view these regulations as providing a positive spin on an industry sometimes overrun with negative connotations. Follow the rules, be courteous, and watch as debtors become more likely to engage with your business. In turn, you’ll experience greater profit margins and establish your agency as a respected institution within the ARM sphere.
Fair & Efficient Debt Collection
FDCPA compliance means following a specific set of rules ensuring honest and structured debt collection. For example, according to the FDCPA, an agency cannot use misleading information or advertise the debt with the aim to embarrass the consumer in order to collect a debt. Seems reasonable right? Use the guidelines set out to develop positive and productive communication with your debtor. After all, it is always easier to collect from a consumer that feels respected than one who potentially feels threatened or embarrassed.
To help your agency succeed, develop and embrace FDCPA best practices. Train your team to observe FDCPA compliance at all costs. Ensure they are properly introducing themselves when making calls, stating the exact amount of debt and the name of the original creditor, and making it clear debtors that they have a right to dispute the validity of a debt. The agency should also regularly monitor and screen FDCPA violations, such as abusive language. These efforts will go a long way in making your agency FDCPA compliant and free from legal suits, fines, and other negative consequences associated with violating this Act.