Monday, February 28, 2011

Consumer vs. Commercial Collections

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.

20 comments:

  1. Great post, I'll be keeping up with this.

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  2. I think debt is interesting, you always hear horror stories of rude calls and harassment. is this the same for a company? is the receptionist just terrified to answer the phone?

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  3. Interesting, I never knew about any of this before, thanks for posting

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  4. I learnt about this when my mom was in debt, awesome

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  5. Informative, and in lay man terms enough for me to understand. Thanks, those were some interesting tactics you posted.

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  6. Very good stuff, keep em coming!

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  7. The FDCPA is supposed to protect people from deceitful or overly aggressive methods, but sometimes you hear of some pretty outrageous stories. Keep the info coming!

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  8. Just a tip: I'd spice up the blog post with some pictures, especially on a dry topic like debt recovery.

    Good info here, but I'm not sure if everybody is reading it

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  9. you make a good point there man

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  10. Useful stuff here dude, thanks! Want more!

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  11. Couldnt agree more with you, so I followed you! hit me back and do the same bud,

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  12. Some people don't understand that debt is necessary in the global economy/society that we live in, everyone wants to be debt free but there is no way that's going to happen!

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  13. Ugh the horror stories are true, got someone in my family going through crap right now.

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  14. dang, but this is good info to learn however

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  15. Thank you so much for writing a lot of this good information! I am looking forward to reading more.
    Debt Collection Singapore

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