What things should you avoid saying to a debtor?

What steps can you take to avoid a lawsuit?

When you work with consumer debtors, you should assume that the debtors are fully aware of their rights and are secretly looking for a way to sue you for violating those rights. Work from the expectation that your debtor is sophisticated:

• Assume that the debtor is keeping notes every bit as good as yours, maybe better. Assume that their records will include dates and times of any phone calls, whether you’re calling at inappropriate times or in a highly repetitive manner (for example, ten calls in a single day), and whether you’ve violated restrictions on communications with third parties, such as their employer.
•  If the debtor requests verification of a debt, provide it. Supply the contracts, invoices, and statements underlying the debt. If they request them again, provide them again (and again, and again).
• Make sure that you provide accurate balances for debts. Don’t charge any unauthorized fees or interest rates beyond those permitted by your contract or state law.

Even if you’re not a third-party debt collector, following all the requirements of the Fair Debt Collections Practices Act (FDCPA) can help you avoid violating state laws, some of which impose similar restrictions on all debt collectors.

Commercial debts are not subject to the FDCPA, so generally you’re not restricted by those laws while collecting against commercial debtors. You must still be careful though, because sometimes it’s not immediately clear which debts are commercial and which are for personal or household use. Also, the trend among states is to extend protection against debt collection to all debtors, regardless of the nature of the debt.

It’s wise to follow the FDCPA requirements even when collecting commercial debts. Although following the FDCPA can protect you if you mistakenly believe a personal debt is commercial or when state law is broader than federal law, you’re doing more than following the adage of “better safe than sorry.” For the most part, the provisions of the FDCPA are consistent with good collections practices. They help define and justify collections procedures that can keep your operations both professional and ethical.

Get Help from Michigan Debt Collection Services

Have questions about collecting debt, or ready to file a claim? Whatever part of the process you’re at, reach out our Michigan debt collection services at (248) 645-2440 or submit a contact form here.