Credit Policy for businesses and how to extend credit and manage credit risk

The Miami Herald printed an article about creditors versus collection agencies and the laws each must follow.

This has been something that has been getting a lot of attention lately, some business owners aren't sure if they have to follow the FDCPA or if that is for third parties (such as collection agencies) and not them as creditors.

The FDCPA broadly defines a debt collector as "any person who uses any instrument of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another."

While the FDCPA generally only applies to third party debt collectors, not internal collectors or credit managers for a creditor or business owner, some states (such as California) have similar state consumer protection laws which mirror the FDCPA, and regular original creditors.  So be sure you check your states laws and the laws in the states you are collecting in.