The Fair Debt Collection Practices Act is quite possible one of the most important credit and collections laws for an accounts receivable professional to know. This act determines exactly what you can and can’t say to a customer when calling to collect on a past due account, as well as when you call them. Many of the stipulations in the Fair Debt Collection Practices Act would also be considered best practices by the accounts receivable professional industry.


According to the Fair Debt Collection Practices Act, there are a few things that an accounts receivable professional must disclose to the customer before they start the collection process. This includes; the amount of the debt, the name of the creditor, the ability of the customer to dispute the debt within 30 days, or else it is considered valid, and that the customer has the right to ask for verification of the debt.


The Fair Debt Collection Practices Act defines what would be considered “harassment” to a consumer when you are attempting to collect. Whether this is law or not, it is best to follow these as a best practice if you’re an accounts receivable professional. Below defines what harassment and abuse is according to the Fair Debt Collection Practices Act:

  • Using or threatening to use violence to harm the consumer
  • Threatening to harm the consumers reputation
  • Using obscene, profane or offensive language
  • Calling the consumer repeatedly
  • Annoying calling behaviors, such as calling and hanging up repeatedly, calling their family members or anonymously calling the consumer
  • Publishing lists of those who have no paid their debt, unless that is a list to send to a credit bureau
  • Calling at hours that are inappropriate, such as in the middle of the night or early in the morning
  • Claiming to be someone you are not, such as a lawyer, attorney or credit bureau in order to collect on the debt
  • Threatening to arrest, file suit, garnish wages or seize property, unless you actually intend to take steps towards these actions

If an accounts receivable professional violates any of these stipulations in the Fair Debt Collection Practices Act, they can be sued by the consumer. If the consumer wins in court, they can be awarded damages for actual losses incurred, any court costs or attorney fees and up to $1,000 in additional damages. If your customers file a class action law suit, they can recover up to $500,000 or 1 percent of the net worth of your company.

The Fair Debt Collection Practices Act has a huge impact on exactly how and when you can call a consumer. If you are following best practices, you probably are already following these rules. However, we all can get frustrated with customers sometimes, so it is good to remember to stay calm in order to stay within the bounds of legality.