Consumer Debt Recovery

Although consumer debt recovery through the use of a collection agency used to bring terror to borrowers who were experiencing financial difficulties, the Fair Debt Collection Practices Act (FDCPA ) has restored a measure of balance to the collections industry. Now, collections personnel are the ones who are obligated to tiptoe around litigation and class action suits while struggling with a fairly well-defined set of regulations regarding consumer debt recovery. At times it may even seem difficult for agencies to comply with the full round of instructions as they maneuver through this legal minefield. Actions, not good intentions, are generally what courts deem as valid evidence in appealing these cases. Therefore, it is prudent for those involved in debt recovery to carefully consider the methods of collecting funds. Otherwise, some may find themselves becoming debtors as they repay damages and additional penalties!

In the past, a person whose creditor referred their account to a collections agency anticipated a lengthy time of being harassed and threatened verbally. At certain times and places, debtors were probably threatened physically as well. Telephone callers demanded payment at all hours of the day and night. Threats of indebtedness being made known to employers or neighbors haunted a debtor's thoughts. Now, however, collections agencies are limited in the hours they may contact debtors for consumer debt recovery. Such calls may only be made between 8 a.m. and 9 p.m. Debt collectors may also contact a person by mail, telegram, fax, or in person. However, these agents can not continue to contact a person at work if they are informed that the employer does not appreciate such activity.

The contacts must be accomplished in such a way that is not deemed abusive, profane or threatening. No idle threats are permitted regarding what legal actions are pending. In other words, if the creditor has no intention of following through on certain legal options for consumer debt recovery, the collector can not act as though this is a possibility. No false paperwork may be given which deceptively gives the impression that these are legal papers, and actual legal papers may not be disguised as mere paperwork. A collections agent can not pretend to be an attorney or member of some government agency in order to force payments to be made.

Debt collectors involved in consumer debt recovery are not allowed to involve a third party, except to gain information about the debtor's address, phone or workplace. They may not indicate that this is for the purpose of collecting a debt, although they are permitted to reveal their employer if asked for this information. Usually no more than one contact is made with third parties, unless something has changed which leads the collections agent to believe that the person may have additional information. If the collection agency knows that the individual is represented by an attorney, that attorney is the one who should be contacted. So stringent is the effort to keep the debtor from embarrassment that even mail items may not indicate from their appearance that their purpose is consumer debt recovery. Postcards can not be used to contact the debtor, as these may be readily viewed by other parties. Also, debtors may not be subject to having their names revealed in a listing which indicates their situation, or calls their character into question.

Those involved in consumer debt recovery must give the debtor a written notice within five days of the first contact. This item should indicate the amount owed, the creditor's name, and the actions which should be taken if the consumer does not believe that he owes this account any money. In addition, if the consumer does not wish further contact with the collection agency, he or she can write them a letter stating this request. There should be no further contact except to acknowledge compliance with this request (which is somewhat humorous considering that the request was for contact to cease!) or to inform the debtor of a creditor's intent to pursue some specific action. However, if the item is a legitimate charge, it still needs to be paid, and will not be discharged by this letter to the collection agency. The collection agent may not be able to continue to contact, but the person can still be sued by either the agency or the creditor.

Any abuses which occur should be reported to the Attorney General of the state and the Federal Trade Commission. In addition to any action these agencies may take on the behalf of the debtor, the information about the case is useful in establishing trends and the need for specific legislation in areas of misconduct which seem to recur repeatedly. Those involved in debt recovery should take the time to review the Fair Debt Collection Practices Act in order to take note of specific obligations which they may have which are too complex to be outlined here. Individual states may have additional restrictions for those involved in consumer debt recovery.

Philippians 2:3-4 says, Let nothing be done through strife or vainglory; but in lowliness of mind let each esteem other better than themselves. Look not every man on his own things, but every man also on the things of others. There are two sides of the collections procedure. The debtor is under obligation to pay for legitimate debts. The collection agent must clearly state the obligations which need to be met, and also go about the business of collecting these debts in a fair and non-threatening manner which shields the debtor from undue embarrassment. Legal recourse is available for both sides for dealing with uncooperative partners in these arrangements. Therefore there is no call for abusive tactics or character assassination. Instead, each should treat the other in the way he or she would wish to be treated in the same situation.

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