Unethical Collection Practices – and How to Avoid Them

“They said they would issue a warrant for my arrest unless I pay the debt!” the distraught caller exclaimed. “Can they do that?”

Fortunately, such unethical debt collection practices are prohibited by the ...

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Unethical Collection Practices – and How to Avoid Them

Reputable Collectors Never Resort to
Unethical Practices

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“They said they would issue a warrant for my arrest unless I pay the debt!”
the distraught caller exclaimed.
“Can they do that?”

Fortunately, such unethical debt collection practices are prohibited
​by the federal government.

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Ineffective and Illegal

Reputable collection agencies are well aware that harassment of a consumer is not only ineffective, it’s illegal. The Fair Debt Collection Practices Act (FDCPA) ensures that consumers are not harassed or threatened in any way.​
​

​Any debt collector who violates the FDCPA can be sued in state or federal court for damages and legal fees. 
 
Debt collectors who threaten a consumer with criminal charges or jail time are doing so illegally. No reputable agency would ever resort to such tactics.  Rather, reputable collectors are trained to listen to consumers and determine if they have the resources to pay the overdue bill. ​

They’re trained to be quick thinking, problem solvers and effective communicators. Tact, persistence and an understanding of people's motivations are all traits of a good debt collector.

FDCPA Compliance​
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Reputable debt collection agencies make FDCPA compliance a priority. They’ll vigilantly monitor their business practices and procedures, as well as their consumer interactions. And they’ll stay current on all state and federal regulations regarding debt collection.

​A reputable agency will also ensure that all newly hired staff are trained extensively on the rules and regulations that impact their clients and the collection industry in general. Regular staff evaluations are used to reinforce compliance training.​​

More Debt Collection FAQ’s​

​When considering a debt collection agency, businesses often wonder about the impact it will have on their customers. Here are a few frequently asked questions: ​​​

​Will a collection agent visit my customer’s home?
Movies and TV shows love to depict collection representatives knocking on doors. In reality, while visiting a consumer’s home is not illegal, debt collectors almost never resort to such measures. It simply isn't an efficient or effective use of their time.​

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Today’s modern technology allows collectors to make hundreds of contacts a day—many more than by going door-to-door. So you needn’t worry that collection representatives will be paying a visit to your customer’s home.​​​
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​Will a collection representative encourage my customer to file bankruptcy?
When consumers file for bankruptcy, virtually all of their unsecured debts are erased. Both the original creditor and the collector receive little or nothing. So it simply would not make sense for a debt collector to encourage a consumer to file for bankruptcy. A reputable collector's objective is to resolve the debt. To this end, they’ll recommend payment plans and other programs to help the consumer.

If I employ a collection agency, will I lose customers?
A good collection agency would never resort to the types of tactics—like threats or harassment—that could lose you customers. Professional debt collectors are trained to resolve problems, not contribute to them.

Not only should a reputable debt collection agency never cost you customers, it should also never harm your business’ reputation. 

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Sources:
ACA International
Investopedia
Nolo
Windfall