Fair Debt Collection Practices Act Raises Compliance Challenges
A former general counsel at a Kansas City based private equity firm and current partner at Kennyhertz Perry, LLC, located in the greater Kansas City metropolitan area, John C. Kennyhertz advises his clients on regulatory compliance, helping them deal with such agencies as the Consumer Financial Protection Bureau and the Federal Trade Commission. Johnny Kennyhertz also provides advice on federal statues like the Gramm-Leach-Bliley Act and the Fair Debt Collections Practices Act. Passed in 1977 and amended afterward, the Fair Debt Collection Practices Act seeks to regulate the debt collection business with the goal of eliminating abusive practices and providing consumers with the ability to challenge the accuracy of debt information. It primarily applies to third-party debt collectors, and bans them from using “false, deceptive, or misleading representation or means in connection with the collection of any debt.” The rules imposed on third-party debt collectors range from the simple prohibition of contact earlier than 8:00 a.m. or later than 9:00 p.m. to a restriction on contact if the debtor has legal representation. The act also gives private individuals the right to bring actions against collectors and the right to terminate communications in writing.