Clients often ask us: am I required to notify my customer before sending them to a debt collection agency?
The Short Answer
Generally, creditors do not have to notify a debtor before turning over a delinquent account for collections.
Courtesy Notifications: A Best Practice
Many people mistakenly believe that a creditor is required to notify them before their account is sent to collections. While this is not the case, it may be a best practice to give notice as a courtesy on their final bill.
Some creditors refrain from giving their customers an extra warning, holding firmly to the position that timely payments are expected. However, avoiding this surprise could help a business maintain a more positive relationship with its customers. A final notice may also result in the payment before collections, saving your business agency fees.
How Are Debtors Notified?
It is the debt collector's responsibility to notify the debtor when their account has been placed for collection. Under the FDCPA, debt collectors must provide written notice containing, among other things, the amount of the debt, the name of the creditor, and certain disclosures about their rights.