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Debt Collection

Debt collection refers to the work done to recover balances from credit accounts that are past due. Most commonly, debt collection specifically references third party debt collectors whose clients include banks, credit card issuers and other credit grantors, debt buyers, governments, and any organization that extends credit or owns an account where a balance is due. Collection methods traditionally include phone calls from call center agents, e-mails, and letters, and increasingly, SMS text. If an account remains in arrears after these efforts, the collection agency may contract with a collection attorney to file suit to recover the debt, if the collection agency is not positioned to do so.

New_York_Court_of_Appeals

Court Allows FDCPA Suit Where Assignment of Judgment Failed to List Current Balance of Debt

In a ruling bound to increase compliance concerns for purchasers of bad debts and collection law firms hired to enforce judgments against consumers, the United States Court of Appeals for the Fourth Circuit in Powell v. Palisades Acquisition XI, held that the filing of an assignment of judgment is a collection action subject to the Fair Debt Collection Practices Act (FDCPA).

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Judge Rules that Government Debt is Covered by FDCPA, Forcing Collection Agency to Defend

A federal judge this week sided with a consumer plaintiff in denying a motion to dismiss an FDCPA class action case. The collection agency defendant argued that the debt did not fall under the FDCPA because it was incurred in a transaction required by law. The case also involves a claim concerning disclosure through a clear envelope window, a recent development that is sure to pop up more frequently.