As a business owner, it’s important that you get paid by your clients. Even though money isn’t everything, it’s essential in helping you run your business. But what happens if your clients don’t pay on time? What happens if days, weeks and even months go by and clients still haven’t paid their bills? As a business owner, what do you do next?
Many small business owners in this situation turn to debt collection agencies to help them collect on past due accounts quickly and more efficiently. Using a debt collection agency allows you to focus on your business while a third-party company handles the debt collection process. However, debt collectors often have a negative stigma, and you may avoid hiring one for this exact reason. No one enjoys getting a call from a debt collector, especially if they’re being harassed and are getting calls multiple times a day. Not every debt collector resorts to harassment. It’s essential, for both your customers and your business, that you choose one that follows all of the rules surrounding debt collection. So, how can you make sure that you don’t choose one of those debt collectors?
The first step into choosing a debt collection agency is to understand the laws surrounding debt collection. The Fair Debt Collection Practices Act (FDCPA) regulates debt collectors and collection agencies, and there are certain things they can and cannot do when collecting debt from a consumer. It’s important that you understand these laws and that you choose a company that is diligent in following them.
Here’s a list of eight things debt collectors cannot do when collecting debt from your customers:
- They cannot call you at odd hours. It is illegal for debt collectors to call you outside of the hours of 8am and 9pm or on official holidays, such as Christmas and Thanksgiving. If you get a call from a debt collector at 1am on a weekday, you have the right to ask them to stop calling you outside of reasonable hours.
- They cannot threaten you. Debt collectors are not allowed to make threats. They can’t tell you that you’ll be thrown into jail if you don’t pay or that they’re going to sue you if they don’t actually intend to sue you. Additionally, debt collectors cannot threaten to tell your friends and family about your debt problems.
- They cannot use abusive language. If you are ever on the phone with a debt collector and they begin to swear at you or call you names, you should hang up and immediately write down what happened. You can then send this to the management of the agency or meet with an attorney to determine your legal rights as a consumer.
- They cannot ask you to pay more than you owe. If you owe $1,500 for an unpaid medical bill, a debt collector cannot ask you to pay $2,000 for that bill. Debt collectors are never allowed to misrepresent the amount you owe.
- They cannot tell anyone about your debt. Debt collectors are only allowed to discuss your debt with your spouse and your attorney. They may verify your employment or contact information with a third party, but debt collectors are not allowed to discuss any information about your debt.
- They cannot report false information on your credit report. Debt collectors are allowed to be honest about what you haven’t paid, but they’re not allowed to create false information to further hurt your credit. If a debt collector is contacting you, check your credit report to make sure they’re not making any false claims.
- They can’t lie about who they are. If a debt collector calls you and you ask them who they are, they must tell you who they are calling on behalf of to collect the debt. They cannot pretend that they’re a collection attorney or that they have authority that they don’t actually have.
- They cannot keep calling you if you ask that they stop. If you ask for a debt collector to stop calling you at work, whether through a verbal or written request, they’re legally required to stop. Additionally, you can make a written request asking the debt collector to stop contacting you. This doesn’t mean that you’re off the hook for your debt, it just means that a debt collector is no longer allowed to contact you via phone.
All debt collectors are required to follow the Fair Debt Collection Practices Act. If a customer comes to you and says that a debt collector is harassing them, it’s important that you speak to the debt collection agency immediately.