debt collection languageWhen choosing a debt collection agency for your business, it is important that you choose a company that adheres to ethical collection tactics, especially when sending out collection letters. Under the Fair Debt Collection Practices Act (FDCPA), debtors are protected from illegal collection methods by debt collectors. In this article, we’re going to share a few important guidelines that every collection agency is required to follow when sending out collection letters to consumers.

Debt Collection Letter Guidelines:

The Initial Collection Letter

Upon contacting a debtor, a collection agency is required to mail a written notice, known as a validation notice. A validation notice must include the following:

  • Name of the creditor
  • Amount owed
  • How a debtor can debate the amount owed if he/she doesn’t think they owe the debt.

Privacy Laws

Debtors are protected under privacy laws when it comes to debt collection. By law, a collection agency cannot refer to themselves as a debt collection agency on their company envelops.  In addition, an agency is not allowed to send a collection notice on a postcard because that’s considered an invasion of privacy.

Threats & Untruthful Statements

Sending a debtor a letter that has empty threats is illegal. For instance, a debtor cannot threaten that a consumer will be arrested or sentenced to prison if they don’t pay off their debt. In addition, an agency cannot threaten to garnish a person’s wages if they live in a state where wage garnishment is not permitted.

Here are a few additional guidelines that a creditor must follow when sending out letters to a debtor.

  • Federal law requires that the initial collection letter has a 30 day verification notice.

The following statement should be written within the letter: “This is an attempt to collect a debt. Any information obtained will be used for that purpose.

  • Additional letters must include the following: “This letter is from a debt collection agency.”  It is also unlawful for a collector to refer to themselves as a government agency.
  • The collection agency’s office hours must be printed within every letter.
  • The physical street address of the licensed office must appear within the collection letter.
  • The collection letter can only use the terms ‘litigation” or ‘legal action’ if the collector has actually authorized litigation. In other words, they cannot use those terms as a tactic to scare a person into paying a debt.
  • Words such as ‘pay now’ or ‘pay immediately’ should be avoided in the first letter.
  • A collection agency should never offer a creditor a loan arrangement in order to collect on a debt.

These are just a few things that a creditor should abide by when sending out collection letters to consumers.

Tip: Avoid using plain white envelopes for collection letters because they will get identified as a collection letter. Try using a check stock collection envelop instead. The debtor will assume it’s a check and will more than likely open it up.

Click here to find out more information regarding our flat fee debt collection letters.

Leave A Comment