Consumer collections include collection actions involving a business and a consumer. Consumer collections tend to be extremely governed. Along with state laws controlling debt collection, consumer debt collection can also be susceptible to the conditions of the Federal government Fair Debt Collection Practices Act. The FDCPA is supposed to safeguard consumers against excessively aggressive or deceitful methods that could be utilized by an unethical collectors' towards an naive and unsophisticated consumer.
Another type of collection is commercial collection or business to business collection. Commercial collection relates to bad debts to be paid by way of one business to another. Business collection is much less controlled simply because it is assumed that many companies are sophisticated enough to comprehend their own rights when working with any creditor.
The tactics utilized by businesses engaging principally with commercial collections tend to be much different from those accustomed to collect consumer debts. For instance, because of the large volume of fairly small dollar amounts related to consumer debt collection, a written payment reminder or even dunning notice is a widely used and effective collection device. With commercial collections, the most effective way to demand payment is definitely by telephone. Written collection attempts usually are not likely to have speedy results.
Key point: The laws and regulations change in case a creditor is addressing a consumer (rather than a commercial) debt. The collector must have a comprehensive knowledge of the laws regulating consumer debt collection prior to actually picking up the phone.