CHAPTER 6: COLLECTIONS
Most trade meetings will begin by reading the antitrust or competition law. Participants must stick to the trade association agenda and be careful in private conversations. There can be no discussion of pricing, discounts, or promotional offers. It is important when discussing the customer that you do not violate these laws in any way. Do not get into any agreements with competitors that involve a group boycott against a specific consumer or business. CONSUMER DEBT COLLECTION LAWS Generally speaking, in B2C collections, collectors may not engage in any collections practices that are deceptive or harassing. More specifically, collectors are prohibited by law from engaging in the following actions: Impersonation. A collector may not claim to be someone else, e.g., an attorney or law- enforcement official—nor may he or she use a false identity on letterhead or other written communication. Sending deceptive collection notices. Collectors may not send out notices that have been made to look like court summonses or other official documents, or that give the appearance of having been issued or authorized by an attorney or government agency official. Collection letters should look like other regular business correspondence. Collecting fees. Knowingly collecting, attempting to collect, or threatening to collect any collection fee, attorney fee, court costs or other expenses not stated in a contract or in payment terms. Idle threats. Idly threatening to turn an account over to a collection agency or to take legal action. Collectors may only threaten this type of action if the company undertakes it in the usual course of its business and plans to follow through with the debtor in question. Harassing phone calls. Calling before 8:00 a.m. or after 9:00 p.m. or calling with excessive frequency may be considered harassment. Exposing the bad debt publicly. Making others aware of the delinquency is forbidden unless they have a specific interest in the situation, as would a bank, other creditors, or credit reporting agencies. This means that the department may not send collection notices via postcard or in envelopes with external copy suggesting the nature of the communication. The department also may not reveal any other information about the debtor unnecessarily. If a debtor disputes a debt, the dispute must be disclosed when reporting the debt. When dealing with individuals, one may not inform or threaten to inform the debtor’s employer of the bad debt or threaten to garnish his or her wages prior to obtaining a final court judgment. Intimidation or violence. Collectors may not use or threaten violence against a debtor or their property, threaten their reputation, resort to obscene or otherwise abusive language, or visit a debtor and refuse to leave upon request. In the U.S., The Fair Debt Collection Practices Act (FDCPA) was first enacted in 1977 and has been updated several times since to keep in stride with the ever-changing collections industry. The Federal Trade Commission enforces the FDCPA, the purpose of which is to “eliminate abusive debt collection practices by debt collectors, to insure that those debts collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent state action to protect consumers against debt collection abuses.”
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THE ACCOUNTS RECEIVABLE SPECIALIST CERTIFICATION PROGRAM E-TEXTBOOK
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