Small Business Debt Collections Law Trap

When someone owes your small business money, you certainly feel

like a victim. But did you know that if you aren't careful, you

could break the law by trying to get the money back?



How to Break a Federal Debt Collection Law



You have a small business, and your bills are coming due soon.

You could easily pay those bills if a few thousands dollars of

overdue invoices were paid. It's time to give your clients a

few friendly reminders…



1. You call up the biggest debtor at his home number. The

debtor's girlfriend answers and you leave the message that you

were just calling to remind her husband about the invoice you

had sent last month.



2. You get into an argument over the phone with the next

debtor. In the heat of the moment, you say you're referring the

debt to you attorney--when in reality, you know you can't afford

to do that.



3. It's getting late--in fact, it's already after 9pm. But you

know that debtor number 3 tends to stay up quite late, so it's

practically midday for him. So, you cheerfully give him a call

and remind him about the invoice of a couple of months ago.



Congratulations, you may have just broken a federal law three

separate times. Plus, you could be sued for it.



Collections Laws Finer Points



Have you figured out what collections law you broke yet? It's

the Fair Debt Collections Practice Act (FDCPA), the federal law

for collections. Meant to protect consumers from harassment, it

has a clear list of things you can't do. Let's look at what you

did wrong in the last example:



1. Never tell someone other than the debtor that you are

calling about a bill. You can, of course, leave a message that

you called. You can even call someone simply to find out if

they know if a hard-to-reach debtor has moved house. But you

cannot under any circumstances let on that they owe money.

Simply leave your name and phone number as with any other "call

me back" telephone message.



2. Never claim to be involving an attorney when you are not. Of

course, this might seem like a soft area of the law, since

intentions are fuzzy. But, for instance, if it's clear that

suing to recover the debt would cost as much as the debt

itself, your bluff will be obvious in retrospect. To be on the

safe side, don't ever claim to have involved your lawyer.



3. Never call before 8 am or after 9 pm, unless you have the

explicit permission of the debtor. But unless that permission

is in writing, you're safer not calling during those hours,

anyway.



Unfortunately, not every aspect of the law is as

straightforward as this case. For instance, the law is only

supposed to apply to consumer collections, not business

collections. But with home business and telecommuting blurring

the line between work and home, you're better off following the

law's dictates in every case.



Plus, the law has numerous other protections for debtors--or

traps for collectors, depending on your point of view.



Feeling daunted? Before you give up on ever seeing your money

again, consider outsourcing your over-aged accounts receivables

to a professional collections service. After all, there's no law

saying you should let customers rob you.



Please note this article is not intended to give legal advice

and may not be complete or up to date with the most current

collection laws changes.







About The Author: Joel Walsh has written more tips on debt

collection laws:

http://www.debt-collection-laws.com/?%20debt%20collection%20laws

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