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.
Contacting Your Customers – Do you know what measures you’re allowed to take when it comes to trying to contact your customers? The Fair Debt Collection Practices Act protects debtors from certain methods of collecting debt.
For example, there are limitations placed on the times during the day, as well as weekend, when you can contact debtors. There are also limits governing where you can and cannot contact delinquent customers about their past due accounts. Make sure you understand and operate within these legal prescriptions.
If for some reason you need to contact a third party to try and reach the original debtor, then you’re also restricted to only asking for information concerning the best ways to reach the actual debtor.
Disputes About Ownership Of The Debt – Sometimes a debtor may deny owing your business any money at all. If this happens then you are obliged to send written verification of the outstanding debt that includes clear payment instructions.
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.
Sometimes debt collection can be a difficult process, but as long as you understand the debt collection laws or the collection agency laws and how they can affect which actions you need to take to recoup money owed to you then you may find it’s not as difficult as it sounds.
Learning about the things you are allowed to do legally can also help you to build debt collection strategies that means you’re able to contact your debtor properly and collect on the debt owed to you.
Drew Matthews has been a notable market place expert, business consultant plus author when it comes to business debt collection procedures for 30 years. He provides more valuable ideas and information about collection agencies.