While customers may not want to receive calls from a debt collection agency, your business should ensure payments are made right away to stay debt-free. Moreover, the debt collectors can be downright intrusive. Besides, the legal authorities have mandated how many times a debt collector may call a consumer about their outstanding payment.
As you stick to the article, our commercial debt collection agency will help you understand the limitations of your debt collection strategy. However, there are certain restrictions you should be aware of.
Fair Debt Collection Practices Act
The Fair Debt Collection Practices Act is the primary law governing how a collection firm should act. While the FDCPA applies only to a debt collector, still debt buyers may have to comply with the FDCPA. In most cases, the FDCPA may not regulate original creditors, while some exceptions might be.
The FDCPA may not specifically limit call time. However, the FDCPA addresses
- When a debt collector is permitted to call a consumer
- Whether the collector may contact repeatedly
- When the collector must cease calling a consumer
Phone call restrictions
The act protects debtors from abusive and unfair debt collection practices. While there’s no specific cap on the number of times a debt collector can contact, collection firms shall violate federal law if they call the consumer in the following situations.
- Calling the debtors more than seven times within seven consecutive days
- The collector calls within seven consecutive days after having spoken with the consumer about the debt
Basically, all these limitations apply to each specific debt. However, if your customer owes several debts, the commercial debt collection may call more often. Apart from federal law, some states have laws limiting the collection firms.
Taking debtor to court
At the most extreme point, a commercial debt collection agency may send a notice regarding the payment. Also, they may take matters to court if you fail to pay. Besides, any debt collection agency may file a lawsuit against you. However, whether they’ll take the debtor to court depends on several factors.
When a collection agency files a lawsuit, you’ll receive a summons and the details of the case. Debtors are expected to respond to the lawsuit even if the debt does not belong to them. Failure to respond lawsuit may default judgment against you, and the service provider may do any of the following:
- Wage garnishment
- Seize personal property
- Levy bank accounts
- Place liens on the property
What to do if the debtor gets sued?
If the debtor has been sued by the commercial debt collection firm, here are the steps you need to go through.
If you have been sued, you should provide the correct documents. This includes proof that debt doesn’t belong to you or the lawsuit was filed beyond the statute of limitation for debt.
If the debt belongs to you, it’s best to negotiate a settlement.
Fight the lawsuit
If settlement does not seem to be an option, be prepared to defend the lawsuit. You may have multiple defenses available depending upon the circumstances.
Debt collection is one of the most sophisticated tasks. Moreover, you don’t want your core team to focus on mundane tasks like the collection. Therefore, it’s best to leave things to the professionals. Then, the right team will work on specifications for seamless collection capability.
Before you take any step further, it’s essential to partner with the right team. We take tremendous pride when it comes to debt collection methods. Also, we value your customers and ensure a firm and professional debt collection strategy.