Collection Fraud Safeguards For You And Your Business
Collection fraud is clearly on the rise, due in large part to a national recession and large job layoffs. As far as news and statistics regarding debt and debt collection figures go, it would come as a surprise to find that in the year 2007 alone, there were more than seventy one thousand complaints filed regarding collection fraud in particular. According to a report published by the FTC (Federal Trade Commission) in 2007, complaints against collection fraud and unfair debt collection practices have drastically increased since 1999, almost by six times. This has come into being as a result of the increasing number of consumer debts along with other reasons like high interest rates, bankruptcy protection laws, stagnant income, increase in identity theft, etc. The statistical estimation has revealed that on an average almost every citizen of the United States actually owes more than eight thousands US dollar in consumer debt. Such a terrible state of affairs has given rise to the creation of a general awareness situation and made common citizens more aware about their consumer rights and their rights against debt collection fraud. One often hears about people being harassed by predatory creditors while facing embarrassing situations culminating in mental anxiety. Of late there have been changes made in laws, which are geared towards protecting debtors from such practices. As a result of such legal protection creditors have become more sensitive and wary in their collection methods and handling of debtors. However given the number of complaints against such unfair practices of harassment, it is necessary that consumers and business owners should be made aware of debt collection fraud, an issue we believe concerning both the creditors and the debtors alike. Here are few basic norms to avoid collection fraudMost of the legal regulations that safeguard the debtors are applied to the third party debt collectors or lawyers. However the restrictions upon the creditors are applied by the general consumer right acts.The communication process used by the debt collectors should be authoritative, and clear. For example, while sending post cards are restricted, sending certified letters, or making a telephone call and also faxing or sending telegrams are well recognized methods for communication. The debt collectors have to make sure that the communication of information is received by the debtor with a signed receipt confirmation. Debt collectors should also document every communication to avoid collection fraud.If requested via certified letter by the alleged debtor, the collectors are restricted to continue a certain medium of communication as indicated by the debtor. For example, the debtor may request to send letters only and not to make any phone calls. The collectors have to follow this with some exceptions.Making collecting calls at inconvenient times are also regarded as unfair debt collection practices. For example, a collector should call between 8 a.m. to 9 p.m. In case the debtor has requested against phone calls at their workplaces, then such wishes are to be respected. In case the debtor wants to make all contacts through his /her attorney only, then the collector is restricted to communicating with the debtor, only through such means.The creditors and collectors have to be very clear and definite about all the terms and conditions about the dealing from the very beginning. Along with a written prospectus, the creditor also should have face-to-face counseling session with the debtors to avoid any future misunderstanding of the terms and clauses.Any kind of threatening, libelous, obscene or insulting words or tones, any kind of harassments are considered as highly unfair debt collection practices.If not agreed upon previously, the collectors cannot ask for a fine for a late payment.
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