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Are creditors subject to the FDCPA?

Having to collect from your company's debtors in West Palm Beach is no easy task. Doing so forces you to walk the delicate line between being assertive yet not completely destroying the potential for a continued business relationship. Yet ultimately, the need to collect what is owed to support your company's operations may require added effort on your part. When that is needed, debtors may be quick to claim your actions qualify as harassment, and thus are in violations of their rights under The Fair Debt Collection Practices Act. Is this true? 

According to the Federal Trade Commission, the FDCPA bars debt collectors from using harassing or deceptive tactics when trying to collect debts. Those tactics are detailed in the Act itself, as is the type of entity that it covers, Specifically, the FDCPA applies to "debt collectors." The language of the act defines such entities as any person or organization "who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." Notice the inclusion of the words "owed or due another" as these are important in the application of this Act. 

Conversely, the FDCPA defines as "creditor" as any person or organization "to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another." Thus, the distinction between debt collector and creditor is quite clear. 

When attempting to collect debts in-house, you are not subject to the restrictions of the FDCPA. The only exception would be if you collected under a different name that gives the impression the debtor is not dealing with the same company. 

 

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CreditorCollections, A Law Firm

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