Fair Credit Collection Guidelines

Creditors may relinquish delinquent accounts to third-party collection companies. Debt collectors work for the original lender prior to the creditor charging-off the account. Creditors may also sell accounts to debt buyers, after charge-off. A collection agency or debt buyer's primary objective is to prompt an account holder to remit the account balance. The Federal Trade Commission regulates debt collection guidelines, which are outlined in the Fair Debt Collection Practices Act---FDCPA.

Method of Contact

According to the FDCPA, collection companies and debt buyers may contact an account holder via phone, email, regular mail or fax. Collection agencies and debt buyers also have the right to contact an account holder's family, employers and neighbors in an effort to obtain current contact information on the account holder. The types of contact information these companies may seek includes the current address, phone number and employer. Collection agencies must respect the account holder's privacy and not divulge the specific reason for their call.

Contact Restrictions

Collection agencies and debt buyers may not call an account holder before 8:00 in the morning or after 9:00 at night, local time, without prior permission. Collection agencies and debt buyers may not contact an account holder at work if they have already been requested not to do so orally or in writing. The Telephone Consumer Protection Act---TCPA---stipulates that debt collectors and debt buyers may not contact account holders' cell phones using an auto dialer without the account holder's prior written consent.

Account Holder Rights

Consumers have the right to stop debt collection calls and/or written communication. According to FDCPA guidelines, debt collection agencies and debt buyers must stop all personal contact once an account holder submits the request to do so in writing. The collector may contact the account holder once more in writing to advise that there will be no further contact or that they have filed a lawsuit or other legal action relating to the account. Account holders also have the right to contest credit accounts that the collectors claim they owe by filing a dispute. Timing is important when filing a dispute; account holders have 30 days from the date of the original written communication from the collector to contest credit accounts. Once an account holder files a dispute, collectors must stop collection activities on the account. The collector has 30 days to provide proof of the validity of the account.

Credit Reporting Guidelines

Third-party debt collectors and debt buyers can report a delinquent account differently on a consumer's credit report than the original creditor. Collectors are not allowed to alter the original date of the delinquency, but they may list the account separately as a collection account. The original creditor may list the account as a charge-off. Debt collectors may also report an outstanding balance that is different from the original creditor's account listing due to accumulating interest and other fees. After seven years, delinquencies, charge-off accounts and other negative account entries must be removed from a consumer's credit report.