If your business collecting its own debt under another business name as the first party creditor you may be subject to the FDCPA regulations. Section 803 (a) of the FDCPA regulations further provides that the definition of a debt collector includes "any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts".
To summarize an article published in the April 2016 Collector Magazine, there are five ways the FDCPA's requirements can apply to creditors:
- If a creditor collects its own debts but uses another name to do so, it must adhere to the FDCPA regulations.
- If a debt is in default when a creditor obtains it, the activities to collect the debt are covered by the FDCPA.
- If a creditor's debt collection practice would violate the FDCPA, it may constitute an unfair, deceptive or abusive act or practice (UDAAP).
- Ensure that when using a third part collection agency that they are "meaningfully involved" in the collection of your unpaid receivables including all aspects of the collection process. If they are simply sending letters on your behalf the FDCPA may be implicated.
- Become familiar with state laws that regulate first party collection activities.