Ethical and Moral Debt Collections

As a debt collector for more almost 30 years I understand the need for a collection process in a healthy accounts receivable management program. All businesses providing goods and services must get paid for their products and services. In today’s economy, collecting every dollar owed is crucial, hence the need for “collections”.

Whether it’s the biller or office manager at the doctor’s office, the leasing manager at the apartment community, or the credit department at the local water company, someone must do it.

I believe that using a collection agency is an integral step in the accounts receivable management process. Many creditors use collection agencies, some do not. Some creditors view a collection agency as a last course of action. They often view collection agencies as just a little bit “shady” or not quite ethical. This is a stigma that the vast majority of collection agencies do not deserve. Most collection agencies, like TSC, strive to operate their business in a professional and ethical manner. Most collection agencies, like TSC, belong to ACA International as well as their state collectors’ association. Most collection agencies, like TSC, also work very hard to stay on top of ever-changing legislation that affects the collection industry and to comply with these regulations.

But complying with all of these rules, regulations and statutes should be a given for any ethical and professional collection agency. Beyond this however lies the moral aspect to collections. What many proponents of debt collections loose sight of is the fact that the consumer actually does owe a legitimate debt and has a legal and moral obligation to pay it. Consequently, there are two sides to this relationship. The collector has a responsibility to inform the consumer about the debt and attempt to collect the debt in a respectful and professional manner, and the consumer has a responsibility to pay the debt.

As a creditor, it is very important that you select and use a collection agency that stays current and complies with the laws and regulations that control this industry. Be sure that your collection agency is a member of ACA and their state collectors’ association and has continuing training and monitoring for its collectors as well as a current compliance policy, because not all collection agencies operate morally and ethically.

This is evident by a recent $3.3 million dollar settlement by a Corona, California collection agency and the Federal Trade Commission. This unethical collection agency preyed on consumers by using abusive collection tactics and making bogus threats. The Federal Trade Commission stated the collection agency violated the Fair Debt Collection Practices Act by calling consumers and their employers, family, friends and neighbors, posing as process servers seeking to deliver legal papers that purportedly related to a lawsuit. In some instances, the defendants threatened that consumers would be arrested if they did not respond to the calls. The unethical collection agency owners and their employees masqueraded as attorneys or employees of a law office, demanding that consumers pay “court costs” and “legal fees” even though the operation had not filed lawsuits against consumers. The collection agency owners have been permanently banned from debt collection services for life.

By | 2015-10-09T22:50:23+00:00 April 8th, 2014|