Companies find debt collection a huge problem and normally do not have the resources to put in to collect their due receivables. It is all the more difficult for the in-house collection staff to collect dues from abusive consumers.  The services of the professional debt collection agencies should be considered as their sole function is to collect dues from the defaulters. To prevent abusive practices in the collection of debts from the consumers and to promote fair debt collection practices the Fair Debt Collection Practices Act (FDCPA) added the Consumer Credit Protection Act in 1978.  This act gives an opportunity for the consumers to dispute and obtain validation of debt information to ensure the accuracy of the information.  The act has also created the guidelines for debt collectors involved in the debt collection business and also defines the rights of the consumers with the debt collectors.  Under this act penalties and remedies for violations are also prescribed.  It is used in certain cases in conjunction with the Fair Credit Reporting Act.

Types of Debt Collection Services:

• Data collection services
• Collection credit services
• Collection financial services
• Check collection recovery services
• Agency collection recovery services solution
• Diversified collection services
• Refuse collection disposal services

The debt collection agencies work on commission basis and a lower fee means they get paid less and are less motivated in collecting.  One should understand that they are also businesses and aim to earn profit. If they get low fees that means they would cut back on their efforts to collect debts to earn profits and would result in not achieving the desired level of collection. So the alternative method is to share a certain percentage of the money collected with the debt collection agency. If consumers are aware of the Fair Debt Collection Practices Act, and learn their rights, they can proactively make a plan to talk to the debt collectors. The following are prohibited as per this act:

1. Contacting  and disclosing the consumer’s debt to others
2. Contacting the consumer after being asked to stop and causing the phone to ring or repeatedly engaging the consumer in conversation in an attempt to annoy abuse or harass the person at the receiving end.
3. Contacting the consumer at their place of employment.
4. Contact the consumer after receiving the consumer’s written request for verification of the debt amount.
5. Misrepresenting the debt amount or using deception such as posing as an attorney or law enforcement officer.
6. Threatening arrest or legal action that are not permitted or legally contemplated.
7. Using abusive language in communication in relation to the debt.
8. Contacting by using post card any other embarrassing media.
9. Report false information on the consumer’s credit report or threatening to do it during the debt collection process.
10. Use any unfair practice to collect the debt.

Consumers should conduct all communications with the debt collection agency in writing.  They can report any violation of the act to FDCPA in writing.