Over thirty years ago, Congress gave the citizens of the United States the Fair Debt Collection Practices Act, most commonly is referred to as the FDCPA. While the law is specifically directed to third party debt collection agencies, individual states may have finance law that goes beyond third party collection agencies to govern in-house, first party debt collection efforts.
The usual mechanics of collection and repossession agencies are to take many accounts on contingency. Certainly that was the case when the federal government first took notice of consumer abuses and congress created the FDCPA in 1978. Agencies went overboard with harassment, scare tactics, and deception to force the debtor to pay their bills and congress noticed. The enactment of the FDCPA has created a set of laws that the collector and repossession agency must operate in accordance with, and those laws are rumored to be appended to cover the phenomenon of social media and common place of cell phone use.
Differences between the two levels of collection is made clear in the plain language that states a consumer does have the right to demand that no more contact be made by a collector. The consumer is required to make that demand with a cease and desist letter to a third party debt collector, but does this really include a repossession attempts? Short answer: Yes, by phone.
Shortly thereafter the law continues to read that this only applies to a party that is collecting a debt on behalf of another. This specifically is for third party debt collectors and repossession agencies. So if you’re the owner of the debt or collateral knock yourself out. You may lawfully continue to contact the debtor directly even after a cease and desist letter has been received. This in-house collection effort is also referred to as ‘self-help recovery’ in many state finance codes.
FDCPA subsection 1692 a (6) states that any agency that is enforcing a security interest is governed by this law. This does include repossession agencies. Regardless of the agreement to collect money for the lien holder, recovery of secured collateral is enforcing a security interest.
The introduction of the CFPB to govern consumer complaints at a hands-on investigation level monitors debt collection and finance contracts intervening only when a violation of any law has occurred. There currently is no CFPB intervention of skip tracing other than to recognize it as a necessary tool to locate debtors for the purposes of collections.
by Valerie McGilvrey
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Revised February 7, 2016