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Understanding the Laws Governing Actions Taken by Debt Collection Agencies

Posted on in Debt Collection

Chicago creditors’ rights attorney for debt collection agenciesThose who always pay off their credit card balances at the end of every month and pay all of their other debts on time may never come into contact with a debt collection agency. A debt collection agency is a separate company that many lenders and creditors use to facilitate the retrieval of unpaid debts from consumers. Most of the time, hiring a debt collection agency is used as a last resort, after a creditor has already tried and failed several times to recover the payments themselves. A debt collector can be a good choice for some lenders and finance companies, but there are federal rules and regulations that they are subject to. Before hiring a debt collection agency, you should be aware of the limitations they have.

Rules for Debt Collection Agencies

Debt collection agencies will typically try various methods to retrieve past-due debt, including calling the debtor, mailing delinquent notices to the debtor’s address, and even visiting the debtor’s residence in extreme circumstances. The Federal Trade Commission (FTC) is the governing body that oversees the practices of debt collection agencies to ensure everyone is in compliance with the Fair Debt Collection Practices Act (FDCPA). According to the FDCPA, forbidden actions by debt collection agencies include:

  • Harassing debtors about their debt: This means a debt collection agency cannot do certain things that a person might find harassing or abusive. Things such as threatening violence toward the debtor or their property, using obscene language when talking with the debtor, or repeatedly calling after a debtor has requested calls to stop all qualify as harassing behaviors.

  • Lying to debtors: Debt collection agencies are also not permitted to lie to debtors in an attempt to get them to pay. This means they are forbidden from making false statements to the debtor, such as stating they work for a government agency or threatening to take legal action that cannot actually be taken against the debtor.

  • Engaging in unfair practices: In addition, debt collection agencies are forbidden from using unfair or otherwise unconscionable means to recover debt. This includes collecting fees, interest, or any other amount when collecting the amount owed, depositing or threatening to deposit a postdated check before the date specified, or taking property unless there is a legal avenue to do so.

Our Illinois Debt Collection Attorneys Are Here to Help

At Walinski & Associates, P.C., we understand how important it is for you to receive the debts that you are owed. Debt collection agencies can look attractive to a bank or other institution when a creditor has not paid, but there are certain limitations you should be aware of. Our knowledgeable Chicago, IL debt collection lawyers can help you resolve issues with debt collection to get you the money that you are rightfully owed. To schedule a consultation with our office, call us today at 312-704-0771.

Sources:

https://www.investopedia.com/terms/c/collectionagency.asp

https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-debt-collection-practices-act-text

Illinois Creditors Bar Association Chicago Bar Association Illinois State Bar Association
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