Debt collection agencies are increasingly coming under fire with more regulations aimed at them. A recent court ruling sent shockwaves through the industry and outlines how the Fair Debt Collection Practices Act, or FDCPA, must be followed.
The Third Circuit Court of Appeals overturned a lower court ruling in March where the language of a debt collection letter sent to a debtor was at question. The debtor had accrued medical-related debt and was sent a letter that “the least sophisticated consumers” would find confusing.
The letter was received in 2010 from a recovery group specializing in collecting debt for the medical industry. The debtor was notified in the letter that if he felt he didn’t owe the amount listed, he could call an 800 number. Furthermore, the letter said it was an attempt to collect a debt and that information obtained would be used for that purpose. However, the back of the letter said that they would only take disputes through writing.
The circuit court said it could see how the language regarding the 800 number could be nothing more than an invitation to begin a dialogue with the agency. However, they overturned the lower court’s verdict saying recipients of such a letter can’t be expected to have the expertise with legal language to understand it and that it is misleading.
Being FDCPA compliant requires hospitals and the collection agencies it partners with to go over their communications with debtors with extreme caution. The act that protects consumers has been on the books since 1977, and there are still violations being carried out by well-intentioned collection agencies with a reasonable understanding of the act. However, reasonable understanding doesn’t pass when it comes to being FDCPA compliant.
When a debt collector violates the FDCPA, they can be sued for emotional distress, physical distress, attorney’s fees and lost wages – and this is on top of the fine for violating a section or sections of the FDCPA. There are many ways a collection agency can violate the law. For instance, a collector cannot contact a debtor at an inconvenient time (8am-9pm is the safe window), if the debtor has an attorney, if the debtor requests no further contact, or at the debtor’s workplace.
There are provisions in the law that might seem obvious to the reputable collection agency, but are disregarded by those with unethical practices. These provisions include harassment and abuse of the debtor. Agencies can never threaten violence, arrest, use obscene language or make repeated calls.
Companies are urged to select their debt collection agency carefully to avoid sullying their public image. Doing research on the agencies before signing up with them is a must. Checking their record to make sure they’ve stayed FDCPA compliant will help give assurance that the agency is operating ethically and will represent the company well.
Omega RMS, llc., has enjoyed years of servicing companies with debt collection solutions for years. The company has a team of professionals who know the FDCPA and state laws exceedingly well and remain compliant with their guidelines.