FDCPA Compliance Checklist

Debt Collection Compliance for Idaho Financial Institutions

Debt collection is an important component of many Boise based financial institutions. In order to properly and legally conduct this aspect of their business, organizations need to adopt best practices. Not only must banks and credit unions maintain compliance with the Fair Debt Collection Practices Act (FDCPA), but they should also look for ways to make the debt collection process as financially favorable as possible. New technology and automation are proven methods for meeting both of these objectives.

The FDCPA Explained

The government instituted the FDCPA to protect consumers from debt collection practices that could cause them undo harm. The law regulates how creditors can interact with debtors concerning personal, residence, or consumer debts. It also determines how creditors can go about uncovering credit information and recovering the payments on debts.

There are other government regulations that creditors must also take into account. The Fair Credit Reporting Act, for example, regulates an institution’s access to an individual’s credit reports.

Why Complying With The FDCPA Is Always Important

While the government only applies the FDCPA to third-party debt collectors operating on behalf of another person or organization, banks and credit unions that collect debts for themselves should also try to maintain compliance. That’s because compliance with FDCPA regulations coincides with a general adherence to debt collection best practices. Boise banks and creditors that comply with the FDCPA are likely to avoid falling foul of any other government regulations. It’s also best for banks to train their employees in universal FDCPA-compliant practices rather than in accordance with rules that are merely intra-organizational.

Automating Debt Collection Compliance

As debt collectors and credit unions deal with an especially hectic year, automation can help them keep up with the increased workload. The COVID-19 pandemic and its economic fallout have left accounts bloated and overall debt levels higher than ever. Technology allows organizations to maintain compliance without hiring a raft of new employees.

Debt collection software comes with all sorts of built-in features that make compliance easier to ensure. The technology can automatically record important interactions in accordance with government regulations. It will also prevent an organization from contacting debtors outside the hours permitted by the FDCPA. It keeps key communication information stored and filed while barring a collector from contacting a debtor who has submitted a valid written order to desist. All of these features combine to take the burden of compliance off the organization.

A Basic Checklist To Ensure Compliance

Banks and credit unions in Idaho should take every possible step to make sure they are in compliance with the FDCPA. The best way to do that is by following a basic checklist. First of all, organizations need to consider whether they’re officially categorized as debt collectors under FDCPA regulations. If they are, then they must remain compliant in order to avoid legal retribution. If they are not, then they must decide whether it behooves them to remain compliant anyway.

Once a Boise organization has decided to aim for compliance, whether for legal or institutional reasons, it should check for the following factors.

  • No communication takes place in a prohibited fashion.
  • All debt-validation protocols are followed.
  • No deception, abuse, or harassment takes place.
  • No more debt has been collected than what is allowed by law.
  • All payments by a single debtor are properly applied.
  • Any legal action is limited to the organization’s assigned court district.

If an organization can successfully complete this checklist, then it is likely FDCPA compliant.

Maintaining Compliance During The COVID-19 Pandemic

The pandemic has brought both a surge in total personal debt and a sudden increase in the sheer number of government policies. In this environment, especially in Boise, Idaho, it will be especially difficult for debt collectors to maintain compliance. Debt collection software can help organizations overcome these challenges by coordinating complicated compliance steps into a single automated workflow.

Using Technology To Cut Costs And Boost Income

Not only can debt collection technology help an organization maintain compliance, but it can also become a successful cost-cutting measure. Rather than hiring more full-time employees to stay on top of compliance issues, banks and credit agencies can use the technology to lighten the load.

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Writer, reader, husband, father, triathlete, and clearly I drink too much coffee. Living in Boise, Idaho enjoying the 208 and Treasure Valley.