How can credit grantors help themselves and their collectors comply with the FDCPA?

Concerning interest and "add on" fees:

If credit grantors add charges, such as interest or a delinquency charge to accounts, the collection service should be made aware of this practice.

Under the FDCPA, collectors are allowed to add interest and other charges to the past due account if the agreement creating the debt allows it or if it is permitted by that states laws.

Concerning skiptracing:

The law permits a collector to contact a third party in order to locate a debtor. When the collector has good initial information fro the credit grantor, it is easier and faster to locate the missing debtor. This will speed the recovery of the credit grantor's money.

Concerning reassignment of past due accounts:

Credit grantors can assist collection services in complying with the law in the relatively few instances when accounts have been reassigned to another collection agency. An example: A credit grantor assigns an account to Collection Agency A. Unable to located the consumer (debtor) or told by the consumer that communication by the collector should cease or being unable to collect for some other reason, Collector A returns the account to the credit grantor who then reassigns it to Collection Agency B. The credit grantor should inform Agency B that this account has been previously assigned to another agency and what that agency did when attempting to collect the account.

Credit grantors should never assign the same account to two or more collection agencies a the same time. Both the credit grantor and collector could be sued for misrepresenting the amount of the debt, as to the consumber it would appear there were two debts owed.

Which FDCPA provisions should credit grantors
become especially familiar with?

Concerning skiptracing:

Generally, the collector may communicate once with any third party (anyone other than the debtor) in order to obtain the address, phone number and work address of the debtor. However, under certain conditions, for example, to correct erroneous information, the collector may communicate with a third party more than once.

The collector may not disclose to a thrid party any information about the debt itself.

Concerning communications with the debtor:

Generally, the collector may communicate with the debtor (the word "consumer" is used in the law in place of "debtor") between 8 a.m. and 9 p.m. local time of the consumer. If the collector know this is an inconvenient time for the consumer, the collector may set up another time for such communication.

The collector may communicate with the consumer at work, except when the collector knows or has reason to know that the employer prohibits such communication or that calling the consumer at work would be inconvenient to the consumer.

If the consumer notifies the collector in writing that the consumer refuses to pay or wants communication to stop, the collector must stop communicating with the consumer except to advist that : (1) the debt collector's further efforts will be terminated, (2) the debt collector may undertake specific remedies that are ordinarily invoked by the collector or creditor, or (3) where applicable, the debt collector or creditor intends to initiate a specified remedy.

Concerning harrassment/abuse:

The FDCPA prohibits conduct that is harassing, oppressive or abusive to any person in connection with the collection of a debt. It lists six specific actions that are prohibited, including threats of violence, the use of obscene language and the placement of telephone calls without meaningful disclosure of the caller's identity.

The terms "harass," "oppress" and "abuse" are not defined by the FDCPA and are interpreted by the courts when cases are presented. Banning this type of conduct provides a level playing field for all collection agencies and obviously is a benefit to consumers.

Concerning false or misleading representations:

Collectors may not use any false or misleading representations when collecting debts. In addition to this general prohibition, collectors are forbidden from certain specific acts including:

• The false representation of the amount or legal status of a debt
• Threatening to take any action that is illegal or that the debt collector does not intend to take
• The false claim that the consumer committed a crime
• The false representation that documents are legal process
• The representation that consumers who do not pay their debts will be arrested or imprisoned, or that their property will be seized, unless such action is legal and the collector intends to take it.

Concerning unfair practices:

The law specifically prohibits certain practices. Among these are:

• A collector may not charge a consumer for collect calls or telegrams made when the true purpose of the communication is concealed.
• A collector may not solicit a postdated check for the purpose of threatening criminal prosecution

Some practices are allowed, subject to certain conditions:

A collector may add certain fees to the account if state law permits or the agreement creating the debt allows.

Collectors may accept postdated checks. If the check is postdated by more than five days, the collector must send the consumer a written notice on intent to deposit that check not more than 10 or less than three business days prior to such deposit.

Concerning validation of debts:

A collector must send the consumer written notice of his right to dispute the debt within five days after the initial communication with that consumer. The consumer has 30 days from receipt of the ntoice to notify the collector in writing that the consumer disputes the debt or requests validation. Collection activity must halt until the consumer's request has been fulfilled.

In response to such a request, the collector must provide vertification of the debt, a copy of a judgement or the name and address of the original creditor (depending on the specific request) before resuming collection activity. In many cases, the collector will ask the creditor to provide:

• A copy of the statement of the past due account
• A copy of the actual invoice of the unpaid account
• A copy of the agreement creating the debt or
• Some other type of verification

The quicker the credit grantor can provide the required documentation, the quicker the debt collector can send it to the consumer and resume collection activity.