Fair Debt Collection Practices Act

The Fair Debt Collection Practices Act is a federal law enacted in 1977 that legally protects borrowers against the collection of unjust, threatening and unfair debts by third-party creditors. The act applies to what would generally be considered as consumer debts; these debts are accumulated for a personal, family or domestic use. An example of consumer debt could be cell phone bills, mortgage debt, credit card debt, and so on. Commercial and agricultural liabilities are excluded from the FDCPA.

Generally, FDCPA only applies to third-party creditors, which means that the behavior of people who are trying to collect personal debts is not accessible. However, it should be remarked that in some countries, the FDCPA may also be applied to the original creditor.

The FDCPA establishes a set of acts on debt collection that, if violated, can lead to legal action against the debt collector. Another element of the FDCPA offers consumers a way to validate and even discuss debt information. In this way, the FDCPA guarantees the accuracy of debt information.

Fundamentals of the FDCPA

The FDCPA describes a set of behaviors and actions that debt collectors must perform, and these include:

• Litigation: the debt collector must notify the debtor that he has the right to contest the complaint.
• Identification: the collection agencies must inform the debtor that they are collectors of banknotes. Also, they should inform the debtor that any information obtained during the recovery appeal may be used to recover the debt.
• Debt Verification: The collector should allow the consumer to request a debt audit. This notification must be sent to the consumer within five days of the first contact. If the debtor requires proof of the debt, the debt collector must provide evidence of the debts that are usually presented in the form of a receipt or a report. As long as this proof is not provided, the debt collector cannot establish any contact with the debtor.
• Details of the original creditor: the debt collector must indicate the name and address of the original creditor and the place of origin of the debt.

The FDCPA also describes a list of prohibited actions and behaviors. These include:

• Publication of debts: a publication of a consumer debt notification is prohibited. The only exception is that the information is published in a consumer reporting agency or shared with employees of the collection agency.
• Repeated calls: It is forbidden to call the borrower's phone repeatedly for harassment. 
• Contact after refusal to pay: Debt collection agencies are prohibited from contacting debtors who refuse to pay. Although legal action is a genuine possibility in such a situation, more contact with the debtor is considered harassment.
• Misrepresentation: Credit collectors can not imply that they are affiliated with the US government. Besides, all accreditations used to support such statements are prohibited. Even credit collectors cannot claim to be lawyers.
• Harassment and Abusive Behavior: The law makes it clear that collection agents cannot use the threat of violence in their debt collection efforts. The obscene and profane language is forbidden.
• Threat arrest: Debt collection agencies cannot claim that non-compliance with the sentence will result in imprisonment. There is no arrest of debtors in the United States.
• There are no false reports: collection agents cannot report false information to report agencies or other companies. They are also prohibited from threatening false information to borrowers.

Compliance challenge with FDCPA

Collection centers find it difficult to balance their efforts to maximize revenue from a collection, maintain a high level of service and comply with the FDCPA. In large companies, you talk about thousands of calls each week. It can also be difficult for organizations to monitor all these conversations and to ensure that their agents behave consistently.

Best practices for FDCPA

To help your company maintain the FDCPA compliance right and avoid fines, we've put together a list of suggestions and best practices.

• Call collection transcription: If your company only monitors a sample of the calls collected, the compliance gap will remain open. Examine the tools that allow you to transcribe and track each call received.
• Employee Training: Carefully train your agents never to violate FDCPA violations.
• Share best practices: If you monitor 100% of your incoming calls, you can quickly identify the best people on your team accurately. Speech analysis tools can help you in this way because they quickly determine the type of language and behaviors used incompatible and successful collections. These are the invaluable beneficial behaviors of the best employees that can be spread throughout the organization.
• Automatic scorers: check tools that monitor calls and evaluate them in areas such as the Mini Miranda language, the correct language of contact, FDCPA violations, the offending word of any party, and other languages at risk.