Commercial-Debt Collection Statutes for Arkansas:
No specific statutes regulating commercial debt collection exist in Arkansas. However, businesses operating within the state are still subject to general commercial laws and regulations that may impact the collection process. It’s important for businesses and collection agencies to ensure compliance with all applicable federal regulations and to maintain ethical collection practices.
What is the Fair Debt Collection Practices Act?
The U.S. Congress enacted the Fair Debt Collection Practices Act (FDCPA) in 1977, incorporating it into the Consumer Credit Protection Act in 1978. The FDCPA was established to eliminate abusive practices by third-party debt collectors and set forth clear guidelines for their conduct. It also outlines the rights of consumers and prescribes penalties for violations.
Definition of a Debt Collector:The FDCPA defines a “debt collector” as any person using interstate commerce or mail to collect debts on behalf of another party. This includes third-party agencies and attorneys who regularly collect debts.
Scope of the FDCPA:The FDCPA exclusively covers personal, family, or household debts. Business or commercial debts are not subject to FDCPA regulations.
So, if the FDCPA does not apply to commercial debt collection by third parties, how are commercial collectors regulated?
There are no U.S. federal laws, similar to the FDCPA, that regulate third-party commercial (business-to-business) debt collection or provide guidelines for the conduct of commercial debt collectors.
Who is protecting the rights of commercial creditors and debtors?Commercial Collection Agency Association (CCAA)
The premier body governing the activities of commercial debt collectors is the Commercial Collection Agency Association (CCAA), an arm of the Commercial Law League of America (CLLA). These organizations are not government bodies, nor do they have any jurisdiction over non-members. However, both require high standards of practice and ethics in order for a commercial collection agency to become a certified member.
The Commercial Collection Agency Association was established in 1972 to “improve the quality and reputation of the commercial collection industry.” It currently has more than 200 members. Approximately 100 core members represent the most prestigious commercial collection agencies in the United States.
Membership in the CCAAMembers of the CCAA are the only collection agencies in the United States certified by the Commercial Law League of America. In order to obtain certification, the agency must meet rigorous criteria.
Certification Requirements:- The agency must have been in business at least four years prior to application for membership.
- 80% of the agency’s business must be commercial (business-to-business).
- The agency must maintain a separate Trust Account into which all monies belonging to creditors are placed. This Trust Account is reviewed twice annually by the Executive Director of the CCAA.
- The agency must agree to abide by the CCAA Code of Ethics, which sets ethical standards for dealing with creditors, debtors, and attorneys.
- Executives of the agency must meet continuing educational requirements and attend regular CCAA meetings. The member agency must complete sixty continuing educational credits annually.
- The agency must post a surety bond of at least $300,000 for the protection of the creditors it serves.
- One person in the agency must also be a member of the Commercial Law League of America.
- The agency must agree to random periodic site visits from the CCAA Executive Director.
- The agency must be in compliance with all local and state licensing requirements and regulations governing commercial collection firms.
Primarily, the Commercial Law League of America and its Commercial Collection Agency Association have assumed responsibility for looking after the needs and rights of creditors and their customers/debtors. State governments that require licensing and bonding of commercial debt collectors also play an important role.
However, since membership in the CCAA is not compulsory, and some firms may provide collection services in a state but never get licensed, it is up to creditors to ensure they (and their debtors) are receiving the most ethical and highest level of commercial collection service.
How? Check to see if your Agency is both a member of the Commercial Collection Agency Association and therefore certified by the Commercial Law League of America, and is licensed in the U.S. states requiring such licensing.Burt And Associates is a member of both CCAA and CLLA. Also, we are licensed and bonded in all 50 states (where required).
