When it comes to trying to recover delinquent accounts from your debtors, the various debt collection laws can, at times, feel like a hindrance. Clearly, your primary goal is persuading as many late-paying customers as possible to pay their debts, thereby keeping your business' cash flow strong.
Reaching Your Customers - Do you know what the parameters are when it comes to trying to contact your customers? The Fair Debt Collection Practices Act regulates and protects debtors from certain kinds of communications from creditors.
Basically this means that the hours in which you're allowed to contact debtors are limited, so you need to be sure you make your calls during the allowed times. You may also find that there are strictures placed on where you're able to contact customers regarding payment of their outstanding debts.
Should you reach a third party in your attempts to reach the original debtor, there are also restrictions on what you share with that third party. You're only allowed to ask the best way 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.
Correct Information - It is important that you give accurate and truthful information to your debtor. This means you can't imply that you'll involve law enforcement to arrest them, nor can you give the false impression that you may have legal representation working on your business. You are also under obligation not to falsely imply that you have any government agent 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.
Debt collection can be a difficult process, but if you understand and stay on top of the debt collection laws and collection agency laws, and how these govern the choices you can take legally to recover the monies owed to you, then you may discover it not so difficult at all.
Knowing what legal actions you can take can also help you with creating and building successful debt collection strategies, wherein you are able to properly communicate with your debtor and recover the debts owed to you.
Reaching Your Customers - Do you know what the parameters are when it comes to trying to contact your customers? The Fair Debt Collection Practices Act regulates and protects debtors from certain kinds of communications from creditors.
Basically this means that the hours in which you're allowed to contact debtors are limited, so you need to be sure you make your calls during the allowed times. You may also find that there are strictures placed on where you're able to contact customers regarding payment of their outstanding debts.
Should you reach a third party in your attempts to reach the original debtor, there are also restrictions on what you share with that third party. You're only allowed to ask the best way 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.
Correct Information - It is important that you give accurate and truthful information to your debtor. This means you can't imply that you'll involve law enforcement to arrest them, nor can you give the false impression that you may have legal representation working on your business. You are also under obligation not to falsely imply that you have any government agent 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.
Debt collection can be a difficult process, but if you understand and stay on top of the debt collection laws and collection agency laws, and how these govern the choices you can take legally to recover the monies owed to you, then you may discover it not so difficult at all.
Knowing what legal actions you can take can also help you with creating and building successful debt collection strategies, wherein you are able to properly communicate with your debtor and recover the debts owed to you.
About the Author:
John Carmichael has been a leading marketplace consultant, business consultant plus author about commercial debt collection offerings for 30 years. He gives additional beneficial advice and details about commercial debt recovery.
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