What is the number one mistake business owners make when it comes to collecting outstanding revenue?
Besides not hiring a professional collection agency, that is.
Trying to collect from your customers or clients on your own… without knowing the collection laws that apply to your state.
And by way of a disclaimer I am not an attorney.
The material presented here is based on information from the FTC website, and is publicly available information that your customer or client has access to.
So why is knowing these laws or guidelines so important should you try to collect on your own? Because the people you contact “have the right to sue a collector (i.e. you if you try to do this yourself) in a state or federal court within one year from the date the law was violated.”
And if you violate the law you can get sued.
Business Debt Collection Laws
The first thing you’ll need to know is that there are very strict standards regarding how you contact people, and what you say to them once you finally reach them by phone.
And though laws do vary from state to state, following FTC standards will ensure that you remain in compliance.
There are three basic categories most violations fall under:
- false statements
- prohibited practices
Simply put, anyone attempting to collect on an outstanding debt may not harass, oppress, or abuse any one they contact.
For example, you may not:
- use threats of violence or harm
- publish a list of names of people who refuse to pay their debts (but they can give this information to the credit reporting companies)
- use obscene or profane language
- repeatedly use the phone to annoy someone after they’ve been told to stop calling
Anyone attempting to collect on a debt may not lie in the process of trying to collect.
For example, you may not:
- falsely claim that they are attorneys or government representatives
- falsely represent that they operate or work for a credit reporting company
- falsely claim that failure to pay a debt is a crime
- misrepresent the amount you owe
- misrepresent the status of any paperwork sent by mail (i.e. that they are not legal documents when they are, and vice versa)
Debt collectors may not engage in unfair practices when they attempt to collect a debt.
For example, they may not:
- give false credit information to anyone, including a credit reporting company
- send anything that looks like an official document from a court or government agency if it isn’t
- use a false company name
- try to collect any interest, fee, or other charge on top of the amount owed unless the contract that created your debt – or your state law – allows the charge
- deposit a post-dated check early
- take or threaten to take your property unless it can be done legally
- contact you by postcard
Of course, the easiest way to remain in compliance is to get some professional help. Just about any collection agency you choose to hire knows these guidelines and should assume any possible liability for their violation.
Just be sure to ask before signing up with any one company.
Does that make sense to you?
Find a Debt Collection Agency Today
To find the right collection agency for your business click the link below and get your free quotes from qualified and reputable companies…
Click the link and compare free collection agency quotes today.
After all, you really only have two choices:
- you can keep doing what you’re doing (and hope for a different result), or
- you can hire an outside company to help you collect the money you rightfully deserve.
Or follow the link and review our list of collection agencies and research providers one by one for yourself to find the right one for your State or Metro area.
Either way the choice is yours…