How to Check to See If a Collection Agency Can Collect in Your State

A common misconception among consumers is that all states require collection agencies to obtain a state license in order to conduct collection activity in that state. While no federal regulations exist requiring debt collectors to obtain a license in each debtor's state of residence, some states enforce specific rules regarding collection activity. Minnesota, for example, requires collection agencies to register with the state, pay a licensing fee and pass a screening process in order to collect from Minnesota residents. If a collection agency contacts you, find out if the company can even legally collect in your state before making a payment.

Instructions

1

Contact your state's attorney general's office. Ask if debt collection agencies must register with the state government or hold a formal license before collecting from residents. You may also refer to the Privacy Rights Clearinghouse's State Debt Collection Law Sheet in the Resources section to locate your state's regulations with regards to collection agency licensing.

2

Read over any written demands for payment that you've received from the collection agency. Note the full name of the collection agency.

3

Visit your state's Department of Consumer Affairs website and attempt to verify whether or not the collection agency is licensed in your state. Some states, such as New York, provide public licensing information online for consumers to review.

4

Call your state's Department of Consumer Affairs if you cannot locate the collection agency in the government agency's online database or your state does not offer an online database. Give the representative you speak with the name of the company and ask him to conduct a license check.