Laws That Affect Collection Agencies And Collection Accounts

By Author: Courtney Dawson
Total Articles: 39
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The Fair Credit Reporting Act (FCRA) makes it legal for the collections agency to make inquiries on a person’s credit report for only two main reasons. They can make a credit inquiry or they can report the collections account on a person’s credit report.

Having one of your debts turned over to a collections agency can be incredibly detrimental to your credit score. If you want to improve your credit, you must first know all of the laws that pertain to collection agencies and collections accounts so that you can better understand what to do.

There are many laws that pertain specifically to the collections agencies and accounts, so when you want to learn more about what these agencies can and cannot due, consult the following laws for more information.

• The Fair Debt Collection Practices Act (FDCPA)

This law protects consumers from unfair and illegal actions by debt collectors. This law has many vital points that protect the rights of consumers, such as restrictions on when the collections agencies can attempt to collect debts (not before 8:00 AM or after 9:00 PM) and also makes other unfair ...
... practices illegal. Collections agencies cannot threaten consumers with legal action if they have no intention of following through, they cannot lie just to get you to pay your debt and they cannot infringe on a consumer’s personal rights by abusing or harassing them.

• The Fair Credit Reporting Act (FCRA)

This act makes it legal for the collections agency to make inquiries on a person’s credit report for only two main reasons. They can make a credit inquiry or they can report the collections account on a person’s credit report. Other than these two reasons, there is no legal allowance for a collections agency to report on a person’s credit report.

• The Health Insurance Portability and Accountability Act (HIPAA)

This law makes a consumer’s personally identifiable health information protected so that the specific details about a health related collections account cannot be reported or seen on a person’s credit report.

• The Truth In Lending Act and Fair Credit Billing Act

This law is designed to protect consumers and requires full disclosure on any and all specific terms related to credit transactions. Consumers must be given all of the information they must know before they sign up for a specific type of credit.

• State laws

The statute of limitations on a debt is a state mandated law and requires that a debt be put into collections within a certain time frame. This protects consumers greatly.

To really improve your credit, you need to know and understand these laws because you can put them to work for you. If a collections agency is violating any of these laws you can contact a lawyer to get them to stop the illegal actions. This can enable you to improve your credit by getting rid of the false or fraudulent collections account.

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