Regulations For Debt Collection Services

2007-03-08 10:33:40

( Financial )



Debt collection services or debt settlement services are third party agencies that are authorized to collect and negotiate payments of past due accounts. There are certain regulations that must be adhered to by debt collection services when following up payments:

Debt collection services must always indicate that demand payments are being done by a collection service in all communications to the debtor. Subsequently, collectors must also provide the contact details of the creditor in the event the debtor requests for it.

The consumer has a right to make a dispute on inaccurate debt amounts. Debt collection services must inform the consumer that a written dispute must be submitted to the creditor if the amount is inaccurate. Debt collection services must inform the debtor of the deadline in submitting a written dispute. The debt settlement service must then reply to the debtor on behalf of the client with a written validation of the debt amount. Failure for the debt collection service to provide the said information should result in the cessation of repayment demands.

Debt collection services are only allowed to contact debtors within certain hours of the day. No calls should be made at a person’s work place when verbal or written notice has been given by the party.

Debtors may give written notice to debt settlement services so no further contact is made when parties refuse to pay the amount due. The only exception to this rule is when there is an intention to file a lawsuit.

Collection notices that are made verbally or in writing must be done in a professional manner without using obscenities or threats. These companies are not allowed to use deceitful techniques in order to collect loans.

People’s debts are considered confidential in nature. Debt settlement services are not allowed to discuss the nature of the debt with other parties. Debt collection services are not permitted to provide debt information including the consumer’s information on a bad debt list.


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