Question

You are in charge of accounts receivables for your company (i.e. collecting money from unpaid invoices). Some of the debts are more than 90 days past due so you decide to turn the 90+ days receivables over to a collection agency to collect on them. What are the activities that your collection agency may not do pursuant to federal law?

Answer 1

Turning over receivables to a collection agency requires adherence to the Fair Debt Collection Practices Act (FDCPA), which prohibits several aggressive or deceptive practices.

Step-by-step explanation:

When a company turns over 90+ days receivables to a collection agency, there are several activities the agency is prohibited from doing pursuant to federal law, specifically under the Fair Debt Collection Practices Act (FDCPA). Collection agencies are not allowed to:

• Use threats of violence or harm against the person, property, or reputation.
• Publish a list of consumers who refuse to pay their debts (except to a credit bureau).
• Use obscene or profane language.
• Repeatedly use the phone to annoy someone.
• Call without disclosing their identity.
• Contact a consumer at their place of employment if they know that the consumer's employer disapproves of such contacts.
• Contact a consumer at inconvenient times or places, for example, before 8 a.m. or after 9 p.m., unless agreed.
• Represent that they are attorneys or government representatives if they are not.
• Claim you owe more than you do or are not owed.
• Threaten to have you arrested if the debt is not paid.
• Threaten to seize property without proper court proceedings.

Ensuring the collection agency adheres to these guidelines is crucial in maintaining ethical collections practices and upholding the rights of debtors.