Applying for a debt might be easy in today’s world, but when it comes to taking it back, debt collection could be a tricky job. Many a time the creditor goes through a lot of trouble in collecting back their debt. Some keep calling their customers while others take the route straight to their customers’ homes.
Though the debt collection process is tried to be made as friendly to the customers as possible, not all processes are that preferable to the customers. There are many companies, and their employees, who take up actions which are considered to be abusive debt collection practices. These sorts of means are very unfair to the customers and often results in disruption of privacy.
The government believes that no one should tolerate such harassment and has come up with a few rules that protect the customer against any violation of the laws. The Fair Debt Collection Practices Act keeps the customers safe from intimidating or pressurizing behavior of the debt collectors, allowing them to report such behavior.
Even though no lender is allowed to practice such behavior, the act is only applicable for those who do not collect debt directly, such as stores or banks.
Some of the main ideas of the Fair Debt Collection Practices Act are as follows:
- The debt collector can contact the customer to only know about their whereabouts or locations.
- The debt of the customer is to be kept confidential. No debt collector will be allowed to make anonymous phone calls to the customer, pressurize, harass, threaten or use abusive language or behavior with the customer in order to acquire the debt.
- Debt collectors cannot make false and misleading information in order to collect the debt. The collector cannot lie about his or her position, the status of the loan/ debt or consequences of late or non-payment.
- The collector has to send a written and official notice to the customer after contacting them regarding their debt. This has to be done only after 5 days of getting in touch with them. The notice should include all the information about the debt, including the amount, name of the borrower and creditors, other important details about the debt.
Infringement of this act by the credit collector may result in harsh consequences and complaints being filed against them by the customer.
Image credit: cdn.gobankingrates.com