In the dark ages of debt collections, some agencies had to be pulled kicking and screaming from the depths of questionable business practices. Things have changed. The face of the modern agency now reflects a commitment to debt collection compliance with all state and federal regulations. It has taken enormous resources to reach the current level of respectability, but the efforts have paid off in higher recovery rates for clients and greater profits for agencies.
Optio was founded in 2007, years after the passage of seminal legislature protecting consumer interests such as the Fair Credit Reporting Act (FCRA) in 1970, Fair Debt Collection Practices Act (FDCPA) in 1978, and Telephone Consumer Protection Act (TCPA) in 1991.
These three acts represent the core of modern debt collection compliance as well as Optio’s commitment to advocating for clients with the finest professional practices in the industry. Following the principles of gestalt, the organized whole of these laws is greater than the sum of its parts, but each act is worthy of further review.
Fair Credit Reporting Act
Enacted in 1970 and amended several times through 2011, the FCRA regulates how reporting agencies use consumer information, restricts access to sensitive credit information, and defines how that information can be used.
From section 601 of the original text: “It is the purpose of this title to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information in accordance with the requirements of this title.”
It is critical for agencies to follow all FCRA rules, including specifics such as disclosing credit files to consumers upon request, correcting or deleting outdated information, and investigating disputed information promptly.
Fair Debt Collection Practices Act
FDCPA was passed by Congress because it believed “there is abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors.”
Section 802(e) explains that “it is the purpose of this subchapter to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses.”
Applying a consumer-centric approach, Optio enforces a strict conduct policy among all of its collectors as detailed by the FDCPA:
- No harassment or shaming
- No misrepresentations
- No profanity or abusive language
- No threat of harm to consumers or their reputation
- No callback after consumer hang ups
- No email or fax without prior authorization
- No text messages
Telephone Consumer Protection Act
While the FCRA and FDCPA are regulated by the Federal Trade Commission (FTC), TCPA operates under the watchful eyes of the Federal Communications Commission (FCC), thus representing a second layer of federal protection.
First, the TCPA “regulates telemarketing calls, auto-dialed calls, prerecorded calls, text messages, and unsolicited faxes. It also is the authority to create the National Do-Not-Call List.” Furthermore, the TCPA delineates collection calls from telemarketing calls and defines fair practices for debt collection calls.
By law, debt collectors may call residential phone lines (including autodialed or prerecorded calls), but they are required to obtain prior written or oral consent to contact consumers via wireless phone numbers. The emphasis of TCPA is certainly on telemarketing regulation, but debt collection agencies must be mindful of compliance risks involving lawsuits and individual state challenges to the federal law.
Full Debt Collection Compliance
Clients rest easy knowing that Optio’s compliance attorneys stay ahead of changes in legislation and judiciary interpretation to address debt collection compliance from multiple angles.
Optio is fully compliant in all verticals, including industries such as healthcare where the Health Insurance Portability and Accountability Act of 1996 (HIPAA) establishes rules about who can view and receive healthcare records.
Clients enjoy better collection results while benefiting from the increased consumer satisfaction that generates new business opportunities. Contact Optio today to learn how it can help your organization with an individualized program.
