When it comes to trying to recover unpaid accounts from your debtors, the myriad of debt collection laws can sometimes feel as though theyre 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.

Reaching Your Customers - Do you know what the parameters are when it comes to trying to contact your customers? The Fair Debt Collection Practices Act regulates and protects debtors from certain kinds of communications from creditors.

Basically this means that the hours in which youre allowed to contact debtors are limited, so you need to be sure you make your calls during the allowed times. You may also find that there are strictures placed on where youre able to contact customers regarding payment of their outstanding debts.

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.

Disputes About Ownership Of The Debt - Sometimes a debtor may deny owing your business any money at all. If this happens then you are obliged to send written verification of the outstanding debt that includes clear payment instructions.

Truthful and Accurate Information - The law requires that you provide debtors with truthful and accurate information. For example, it is a violation to intimate or threaten arresting debtors for delinquent accounts. You can't represent that you have legal representation, if in fact, you do not. You also cannot insinuate that debtors will be chased after by any governmental authority.

Youre 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 collectors net worth.

Clearly, its very important that your business fully understand these debt collection laws as they relate to your collection strategies. Collection agency laws go beyond simply getting customers to pay their past due debts.

You need to also learn how changes to the Fair Debt Collection Act relates to customer access to credit reporting information. If a customer wishes to verify the information contained in their credit report, you need to make sure the information you provide is clear and accurate. If you violate these laws, business owners can be subject to fines, as well as having the debt owed to them discharged, in some instances.

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 its 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 noted industry expert, business consultant and writer for thirty years on the subject of collection agencies. He offers additional valuable tips and information on debt collection laws.

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