Debt Collection Merchants Rights: Are They Changing?

Debt Collection Merchants Rights: Are They Changing?

Debt collection merchants need to pay strict attention to a recent Michigan court case that could have a lasting impact on their industry. In the court case, a condominium owner disputed a $55 charge from the homeowners association regarding a home assessment. The homeowner disputed the charge because he didn’t know what it was for, and was never given a document detailing the charge. Eventually, the charge was turned over to a collections agency.

The outstanding $55 debt eventually ballooned to more than $1,000, and the collection agency predictably began to aggressively pursue it. However, the agency could not verify what the original $55 debt was for, and the court ruled in favor of the condominium owner for that reason.

Are Debt Collection Merchants Rights Changing?

The Michigan court case, expertly detailed on the ConsumerAffairs.com website, is significant because debt collection merchants have traditionally had the power over the consumer. A similar court case in 1999 – albeit a different ruling – strengthened future cases for debt collection merchants and set a precedent. In short, the case ruled that the debt collection merchant could take the original creditor’s word that the debt was legitimate. The debt collection merchant didn’t need documentation.

What Can Debt Collection Merchants Do?

As the above 1999 court ruling has been used in favor of debt collection merchant rights, the Michigan court ruling will be used against them. So what can debt collection merchants do?

  • Document, document, document: Debt collection merchants must attain and retain any and all documents from the original creditor that could be useful in proving a consumer’s debt is legitimate. Details – date, description of services, a signature from the consumer, e-mail exchanges – are paramount.
  • Know the Fair Debt Collections Practices Act: There are rules for debt collection merchants, such as not contacting consumers at inconvenient times (after 9 p.m. and before 8 a.m.) or places (a consumer’s workplace without the boss’ permission). Additionally, if the consumer has hired an attorney, the debt collection merchant must only contact the attorney. Debt collection merchants need to know the FDCPA cold.

Debt Collection Merchant Accounts at Instabill

The debt collection industry has grown exponentially over the last 15 years. Instabill has provided collection agency merchant accounts to licensed and bonded debt collection merchants for nearly as long. Our merchant account managers are on hand Monday through Friday, 8:00 a.m.-6:00 p.m. eastern time to handle your inquiries in person. Call today at 1-800-318-2713.

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