Creditors rarely, if ever forget or forgive an outstanding debt; and unavoidably, remaining liabilities are typically referred to collection agencies. While the thought of dealing with a collection agency can be disconcerting, they can be helpful in settling outstanding balances. However, before negotiating debt reconciliation, be certain you are familiar with your rights as a consumer.
Debt collectors are organizations or persons contacting defaulters with the intention of collecting payment for an outstanding balance owed to a creditor. Although each collector's purpose may be the same, the collection methods can vary from agency to agency. To ensure fair and consistent treatment the Fair Debt Collection Practices Act (FDCPA), The Federal Trade Commission and the Privacy Rights Clearinghouse give consumers information regarding personal, family and household debt-collection practices. These organizations can guide you regarding unfair collection practices such as harassment, false statements, consumer rights and responsibilities.
Collection Agency’s Licensed to Work by State
According to the Privacy Rights Clearing House (2004) there are no federal licenses or registration requirements for collection agencies. However some states require collection agencies and agents to register in order to collect in the state. To find out if a collection agency or collector is licensed or bonded to work in your state, check out Attachment A on the Privacy Rights Clearing House or on the Consumer Action website.
Fair Debt Collection Practices Act
The Federal Trade Commission compiled a complete text of the federal Fair Debt Collection Practices Act (FDCPA) (15 USC §§1692-1695). The FDCPA was established due to congressional findings of unscrupulous, unfair and abusive collection practices on behalf of collectors and agencies. The FDCPA applies to collection agencies in all states. You also can contact your state's consumer protection agency through the federal government's Consumer Action website or contact your state’s attorney general through the National Association of Attorney Generals webpage. Contacting these organizations can help you check on unlawful collection practices and/or file a complaint.
Patricia A. Chatman is the director of workforce development services at Goodwill Industries of Greater Detroit. She began her writing career in 1994 as a grant and proposal writer. Chatman is currently enrolled at Walden University pursing a Ph.D. in public policy and administration. She anticipates completing her Ph.D. in September of 2010.