When you are looking to collect delinquent accounts, you must comply with laws governing collection practices including the Federal Trade Commission Act and the Fair Debt Collection Practices Act. These laws make it illegal to use unfair or deceptive practices to collect a debt.

Many states also have their own laws governing collections. Speak with your attorney to find out the local regulations you need to comply with.

Failing to comply with collections laws puts you and your business at risk. For example, a debtor can sue you for libel or harassment, and perhaps collect more than he or she owes you in the first place.

You are prohibited by law from doing any of the following:

	Pretending to be someone you are not. For example, you cannot claim to be a law enforcement official or imply that you are an attorney. Nor can you use a fake identity on letterhead.
	Sending out collection notices that look like official court summonses or documents. Collection letters should look like regular business letters, but can state that they are for overdue accounts. They cannot give the appearance of being authorized, issued, or approved by a government agency or attorney-at-law.
	Knowingly collecting, attempting to collect, or asserting a right to any collection fee, attorney fee, court cost, or other expense unless such charges are justly due. Your contract or terms must state the penalties you will charge for late payment. If they don’t, you cannot make claims to these fees.
	Threatening to turn an account over to a collection agency or take legal action unless you plan to carry through. If you do not take this kind of action in the usual course of your business, you cannot use it as a threat.
	Making repeated phone calls, or calling too early or too late. Generally, calling after 8 a.m. and before 9 p.m. is fine. Otherwise, it may be considered harassment.
	Attempting to ruin a debtor's reputation by telling others he or she owes you money. This includes sending collection notices on a postcard that anyone can read, or putting anything on the outside of the envelope suggesting it is a collection notice. You also cannot communicate or threaten to communicate the nature of a consumer claim to a debtor’s employer before obtaining final judgement against the debtor.
	Furnishing information about a debtor without permission, except to individuals and groups with a specific interest, such as credit reporting agencies, banks, and other creditors. You also cannot disclose or threaten to disclose information concerning a debt known to be disputed by the debtor without disclosing that fact.
	Using intimidation to collect. You cannot threaten violence, use abusive language, or visit a debtor and refuse to leave.