When it comes to the debt collection process there are two “sides”—the side of the consumer and the side of the creditor. Today we are going to focus on the creditor-side process. The Fair Debt Collection Practices Act, under the authority of the Federal Trade Commission, is the primary law governing debt collection processes. The act provides the federal government the authority to levy fines and penalties on collection agencies who are in violation of the codes specified in the act.
State laws also play an important part in debt collection governance. State laws stipulate things such as when a when and how a consumer can be contacted, who the creditor may contact about the debt, and the time frame in which a creditor can take action through the courts. In some states, for example, you are only allowed to contact the owner of the debt and you are barred from contacting anyone else, such as a spouse or employer.