Collection Agencies And The Law

Legal Guidelines For Collection Agencies

Collection agencies are allowed to use any legitimate means to negotiate a loan settlement with debtors. But there are legal restrictions on what they can, and will do as part of debt collection.

First, debt collection agencies acting in accordance with the law take the following steps to ensure that the debtor is not being sued fraudulently -

1. They provide written notices of the amount of the debt and the name of the creditor within 5 days of the original communication;

2. They will notify the debtor that he has the right to dispute the debt within 30 days (after which it is assumed to be valid);

3. They must provide a copy of the judgment if there is one and the name and address of the original creditor;

4. Each communication must contain the notice that any information obtained will be used for collection;

5. They must cease communication if asked to do so in writing.

Collection agencies will also communicate with you appropriately and respect your privacy -

1. They will not communicate with you at any unusual time or place without permission from the creditor;

2. Contact the debtor if he is represented by an attorney, if they can contact the attorney;

3. Contact the debtor at his/her place of employment if the employer forbids it;

4. State to any third person that the debtor owes a debt;

5. Communicate by postcard;

6. Use any language or symbol on the outside of an envelope indicating a debt is owed;

7. Harass the debtor