Collector - May 2015

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Adding Fees to Debts, #8000, Updated 4/1/15

501(r) Final Regulations for Charitable Hospitals, #6258, Added 3/24/15

Frequency of Collection Calls: What Constitutes Harassment?, #2333, Updated

4/1/15

Mini-Miranda State and Federal Requirements,

#1145, Updated 3/25/15

Interstate Chart, #3005, Updated 4/1/15

State Laws Governing Oral Communication with Consumers, #2011, Updated 4/1/15

State Licensing Requirements for Debt Purchaser, #4553, Updated 4/1/15

Truncation Requirements, #1514, Updated

3/26/15

apply payments first to interest, and the remainder to principal.

However, it is important to research the laws of the state you are collecting in, as state law might be more restrictive. For example Nevada requires that, unless a written agreement between the parties states otherwise, any money collected on a claim—after court costs have been recovered—must first be credited to the principal amount of the claim. Any interest charged and collected on the claim must be allocated pursuant to the agreement between the customer and the collection agency.

The regulations implemented by the state of New York are a recent example of state requirements for handling consumer payments. In this state, debt collectors will be required to provide both a statement of the payment arrangement and a specific notice of which types of income cannot be taken to pay a consumer debt.

Collectors will also be required to send a statement at least quarterly to consumers with whom they have a payment arrangement while they are making scheduled payments.

Other states’ requirements that
might be of interest:
• Illinois has a specific requirement
for collecting multiple accounts
from the same consumer.

• Hawaii requires every collection agency to keep and maintain a permanent record or have immediate access to copies of the permanent record of payments collected.

Many states have laws and regulations that place requirements on a debt collector’s relationship with its creditor-clients. These regulations most commonly dictate when a collector is to remit any funds it has collected to its clients. There are also provisions, frequently tied to a state’s bond or trust account requirements, that require debt collectors to provide reports to clients on the amounts collected.

In addition, state law may specify how debt collectors should handle and apply payments they receive from a consumer.

Generally, if a debt is undisputed and interest is being collected on it, unless otherwise stipulated by contract, a collection agency is permitted to

Handling Consumer Payments

Look to ACA SearchPoint for information on state consumer payment requirements

• Colorado requires receipts for payments made in cash or other means that do not provide evidence of payment.

• North Carolina does not require a collection agency to refund an overpayments of less than one dollar.

It can be difficult to keep up with the diverse laws in each state. That’s why ACA International has compiled a list of states with unique statutory language specifying how payments are to be applied in various situations and how agencies are to handle the payments they receive from consumers. This list can be found in ACA SearchPoint document #2006, “Handling Payments.” cm

Have you checked out ACA’s member-only SearchPoint library? ACA SearchPoint is filled with documents that put important compliance information related to the FDCPA, FCRA, TCPA, state laws and many other topics at your fingertips! To access ACA SearchPoint, visit acainternational.org/searchpoint.