Accounts Retrievable Systems – Debt Collection Services
If you are a business owner and find yourself having a problem collection money owed to you, you might want to consider hiring a collection agency. A collection agency is a business that pursues payments of debts that are owed by either individuals or businesses. There is no upfront fee to hire a collection agency and if they do not collect the money owed to you, there is no fee. Collection agencies work on a contingency fee basis which means if they do not collect you are not charged. The collection agency makes money only if money is collected from the debtor (often known as a “No Collection – No Fee” basis).
When you hire a collection agency you should be sure that you do proper research before you make the final decision on hiring one. Not all of them are the same and not all are as experienced as the next one. When hiring you should make sure that they hold their integrity and do not use an illicit or illegal practices to collect on your accounts. You want to keep a professional and long-lasting relationship with your clients even if they owe you money. There is a set of laws that are in place in the United States as to what a collection agency can and can not do to collect on debts.
The Federal Trade Commission is the primary federal regulator of collection agencies, although the Bureau of Consumer Financial Protection—created in 2010 and housed within the Federal Reserve—will also have regulatory power over collection agencies. The CFPB announced on October 24, 2012 that it has finalized its rule for supervising debt collection agencies and debt buyers under a definition that will include approximately 175 U.S. companies.
Many States and a few cities require collection agencies be licensed and/or bonded. In addition, many States have laws regulating debt collection, to which agencies must adhere.
The Fair Debt Collection Practices Act is the primary federal law governing debt collection practices. The FDCPA allows aggrieved consumers to file private lawsuits against a collection agency that violates the Act. Alternatively, the Federal Trade Commission or the state attorney general may take action against a noncompliant collection agency, including issuing fines, ordering damages, restricting its operations or even closing it down (see, e.g. CAMCO).
The FDCPA specifies that if a state law is more restrictive than the federal law, the state law will supersede the federal portion of the act. Thus, the more restrictive state laws will apply to any agency that is located in that state or makes calls to debtors inside such a state.