When it comes to trying to recover unpaid accounts from your debtors, the myriad of debt collection laws can sometimes feel as though they’re getting in the way. Obviously your main goal is to try and encourage as many late-paying account holders as possible to pay their debts and help keep your business‘ cash flow strong.

Communicating With Your Customers – Do you know the guidelines and rules when it comes to communicating with your late-paying customers? The Fair Debt Collection Practices Act protects and regulates the kinds of communications allowed between creditors and debtors.

For example, there are limitations placed on the times during the day, as well as weekend, when you can contact debtors. There are also limits governing where you can and cannot contact delinquent customers about their past due accounts. Make sure you understand and operate within these legal prescriptions.

When contacting a third party to try and reach the debtor, you’re also restricted in only asking the third party for information about reaching the actual debtor.

Ownership Of Debt Disputes – There may be instances when a debtor will deny owning the debt, or that they owe your business any money. When this occurs, you are required to send written proof of this outstanding debt

Accurate and Truthful Information – It is imperative that you provide your debtor with accurate information. For instance, it is against the law for you to threaten or insinuate that you’ll have debtors arrested. You also can’t falsely represent that you have legal representation, when in fact, you do not. Nor can you imply that you have some governmental entity chasing after them.

You’re only able to give real information about the debt and your collection methods must abide by the debt collection agency laws at all times. Did you know that for violating the debt collection laws, your debtors could sue you for violation and potentially collect as much as 1 percent of the collector’s net worth.

It is very important that your business clearly understand the debt collection laws as related to your collection methods. Collection agency laws extend beyond simply getting customers to pay their delinquent debts.

You may also need to learn how the changes to the Fair Debt Collection Act may relate to customer access to credit reporting information. They may wish to verify the information listed on their credit report, so you need to be sure the information you provide is always accurate. Business owners that don’t adhere to these laws may face some steep fines and they may even find that the debt owed to them could be discharged.

Sometimes debt collection can be a difficult process, but as long as you understand the debt collection laws or the collection agency laws and how they can affect which actions you need to take to recoup money owed to you then you may find it’s not as difficult as it sounds.

Knowing what legal actions you can take can also help you with creating and building successful debt collection strategies, wherein you are able to properly communicate with your debtor and recover the debts owed to you.

David P. Montana has been a distinguished enterprise coach, business consultant in addition to publisher when it comes to collection agency options for thirty years. He gives further valuable tips and knowledge on debt collection laws.