If you are into debt relief service that the first thing you should know is that it is highly important to ensure your clients and customers pay for the loan products. Apart from this crucial aspect of your business you must also know about a few other things such as:

• The laws of debt collection
• The regulations and compliance requirements and
• The ways to deal with delinquent accounts for achieving the desired results.

There are different rules regarding commercial and consumer collections along with different requirements that may vary according to the state laws as well as the type of industry. These rules and laws are extensively covered under the state laws and federal rules such as:

• The Fair Debt Collection Practices Act and
• The Fair Credit Reporting Act.

Both these Acts are specifically designed to serve and protect the interests and rights of the customers as well as the creditors. However, in contrast, the limitations put on commercial collections are typically subject to the state regulatory agencies only such as the Attorney General’s Office.

The critical aspects involved

You may follow different websites for information and even read several debt settlement reviews but may not come to know about the most critical aspects that are usually involved in collecting such types of debts. You are required to know several laws that will tell you the true meaning of the following:

• What it mean to be compliant with debt collection laws
• What it mean to be non-compliant with such laws
• What is the difference in approach to follow while collecting from consumers and collecting from businesses
• What happens and what can you do when a company goes bankrupt or a consumer files for bankruptcy
• What are the regulations for consumer collections
• What are the regulations for commercial collections
• What are the different state regulatory bodies and statutes and
• What are rules and regulations for consumer and commercial debt collections?

To make sure that you are compliant with the state and federal debt collection laws while dealing with the delinquent accounts there are a few basic requirements in general such as:

• Treating the debtor or the business that owes money fairly
• Staying within the peripheries that govern the specific industry
• Avoiding any deceptive or abusive practices
• Retraining from making any false statements
• Not harassing the debtors verbally or threatening them
• Not calling them at all hours of the day or night
• Sending proper notices regarding the amount of the debt
• Complying with the statute of limitations to send such notices which is usually five days after contacting the debtors and
• Letting the debtors know about the actual total amount owed.

You must also make sure that you protect and respect the privacy of the debtors by not discussing about their debt publicly other than with them or with their authorized representatives.

On the other hand you will be considered to be non-compliant with the debt laws and may also fetch penalties and even cancellation of your license if you engage in any of the following acts:

• Following unfair collection practices
• Adding on questionable and vague service charges or late penalties or any other fees not authorized by state law or mentioned in the original credit contract
• Reneging on agreements with the debtor such as dropping a post-dated check early
• Failing to notify other representatives about the prior payment arrangements made
• Making false statements or threats for a lawsuit, imprisonment or other legal action that you are not legally allowed to take
• Lying about any facts related to the specific debt
• Using aggressive collection procedures
• Calling outside of the regulatory statute and
• Doing anything to the contrary of what is mentioned in the list of actions for compliance with the debt laws.

If you engaging in any such type of activities it will put your company in a dire position along with your reputation on the line. It may lead to fines and even a civil lawsuit leaving aside the chance of total dissolution of your firm.

Regulations for consumer collection

There are a few specific rules and regulations designed by the government to protect the rights of the debtor and the creditor both in the Fair Debt Collection Practice Act. According to this Act all such requirements that are also available in the Consumer Compliance Handbook include:

• Requirements for authenticating the debt as well as the total amount owed by the debtor
• Prohibitions against treating any debtor in an abusive manner irrespective of the amount owed
• Prohibitions against providing false, misleading, deceptive information to the debtor
• Prohibitions against using unconscionable means to collect the money
• Ensuring that all payments received in case of multiple debts are in accordance to the instructions of the consumer.

When it comes to collect commercial dues the rules and regulations laid down by the FDCPA are somewhat more complicated. There are a number of acts and statutes that are regulated by different organizations which you must follow at all times. These trade organizations are non-governmental bodies that ensure ethical practice is established and maintained. Some of the active members are:

• Association of Credit and Collection Professionals that brings all collection agencies and law firms together
• National Association of Subrogation Professionals for subrogation and training through educational webinars and podcasts
• Washington Collectors Association that ensures ethical standards for the collection industry
• American Medical Billing Association that provides information for the medical billing to the regulatory bodies and
• Accounts Receivable Management Collection Agency engaged to improve the overall.

There are also a few other things regarding collection that you should know and that includes the statutes and the state regulatory bodies. These bodies though follow the laws set by the government can still include a few according to the requirement of the state. Such reforms are usually brought by the State Attorneys General.

These reforms are largely based on the industry requirements as well as the region in which the business is located. Moreover, the state laws and agencies set the legislatures based on the needs and concerns of the citizens.

Knowledge of these will help you streamline the collection process for your business.