CHAPTER 6: COLLECTIONS
THE DEBT COLLECTION IMPROVEMENT ACT OF 1996 (DCIA) The Debt Collection Improvement Act of 1996 (DCIA) came about as a response to the increasing amount of delinquent non-tax debt owed to the U.S. government. The act centralized the collection of debts to the Treasury and the Financial Management Service (FMS). The FMS put in place the Treasury Offset Program (TOP), initially established under the DCIA. The TOP compares the TINs of debtors to names and TINs of recipients of federal payments. If a match is found, the payment is offset to satisfy the overdue debt. Under the act, federal agencies are also required to turn over all non-tax debt to FMS for collection. Collection of delinquent tax debt was added to TOP in 1999.
For more information, go to https://www.fiscal.treasury.gov/debt-management/about/about-dcia.html
THE FAIR CREDIT BILLING ACT OF 1974 (FCBA) The Fair Credit Billing Act amended the 1968 Truth in Lending Act and applies to “open end” credit accounts, such as credit cards or revolving charge accounts. The act also only applies to billing error disputes and does not apply to installment contracts. Under the act, consumers can dispute billing errors such as unauthorized charges, incorrectly charged amounts, failure to post payments, and charges for undelivered or unaccepted goods. Consumers have 60 days in which to file a written complaint after the bill is mailed to them; otherwise, the consumer forfeits their right to have the error corrected. The act allows companies 90 days to resolve a billing dispute after receipt of the complaint.
For more on this act, go to https://www.ftc.gov/legal-library/browse/statutes/fair-credit-billing-act
THE BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2005 (BAPCPA) The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) was intended to reform the personal bankruptcy process in the U.S. BAPCPA is a disclosure of rules regarding bankruptcy and debt counseling that applies to debtors, creditors, lawyers, debt relief agencies, and petition preparers. It encourages Chapter 13 filings (restructuring over Chapter 7 filings (full discharge of debt). Under the act, debt relief agencies, lawyers, and petition preparers are held accountable for fraud in bankruptcy proceedings, and it is a violation for any party to purposely misrepresent themselves. The act also discloses funds that are exempt from being counted among assets, such as a child’s savings account or a retirement fund. All collection efforts must cease once a debtor files for bankruptcy, including collection efforts for child support and alimony payments. LIEN LAW U.S. laws specify various liens that could be valuable in pursuing payment of an unpaid debt. These are used mostly in B2C and very large B2B transactions. There are times when accounts receivable departments may find it necessary to pursue increasingly aggressive means to secure payment from delinquent customers. Liens are one such means.
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THE ACCOUNTS RECEIVABLE SPECIALIST CERTIFICATION PROGRAM E-TEXTBOOK
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