Commercial Debt Collection Statutes for North Carolina

You are here:
  1. Home
  2. Collection Laws by State
  3. Commercial Debt Collection Statutes for North Carolina

Commercial Debt Collection Statutes for NORTH CAROLINA:

Note: North Carolina’s Unlawful Debt Collection Practices statutes (See N.C. Gen. Stat. § 75-50 – 75-59) do not apply to collectors of commercial debt. However, commercial collectors are subject to the state’s collection agency registration requirements (See N.C. Gen. Stat. § 58-70-1).

NORTH CAROLINA – Definitions

As used in this Part, the following terms have the meanings specified:

  • (1) “Collection agency” means a collection agency as defined in G.S. 58-70-15 which engages, directly or indirectly, in debt collection from a consumer.
  • (2) “Consumer” means an individual, aggregation of individuals, corporation, company, association, or partnership that has incurred a debt or alleged debt.
  • (3) “Debt” means any obligation owed or due or alleged to be owed or due from a consumer. N.C. Gen. Stat. § 58-70-90 (West, WESTLAW through S.L. 2005-154 of the 2005 Reg. Sess.).

N.C. Gen. Stat. § 58-70-15(a)-(b) (West, WESTLAW through S.L. 2005-154 of the 2005 Reg. Sess.).

NORTH CAROLINA – Exemptions

(c) “Collection agency” does not mean:

  • (1) Regular employees of a single creditor;
  • (2) Banks, trust companies, or bank-owned, controlled or related firms engaged in accounting or bookkeeping services;
  • (3) Mortgage banking companies;
  • (4) Savings and loan associations;
  • (5) Duly licensed real estate brokers and agents when handling claims related to their regular real estate business;
  • (6) Attorneys-at-law handling claims and collections in their own name;
  • (7) Any person, firm, corporation, or association handling claims under court order;
  • (8) A person, firm, corporation, or association that purchases non-delinquent claims for valuable consideration.

N.C. Gen. Stat. § 58-70-15(c) (West, WESTLAW through S.L. 2005-154 of the 2005 Reg. Sess.).

What is the Fair Debt Collection Practices Act?

The U.S. Congress enacted the FDCPA in 1977 and added it to the Consumer Credit Protection Act in 1978. Its purpose is to eliminate abusive practices of third-party debt collectors. To that end, the Act establishes guidelines for the conduct of debt collectors, defines the rights of consumers, and prescribes penalties for violations.

The FDCPA defines “debt collectors” as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debt … asserted to be owed or due another.”

“Consumers” and “debt” covered under the FDCPA are defined as specifically referring to personal, family or household transactions. Therefore, debts owed by businesses or by individuals for business purposes (commercial debts) are not subject to the FDCPA.

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

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.

The CCAA is an arm of the Commercial Law League of America (CLLA), the oldest creditor’s rights organization in the country established in 1895.

Membership in the CCAA

  • 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.

Burt And Associates is a member of both CCAA and CLLA. Also, we are licensed and bonded in all 50 states (where required).