The Fair Credit Reporting Act affects every business. It is the means by which the FTC requires businesses to report only accurate information regarding the debts owed to the company by a debtor. Every business owner handling in house collections needs to fully understand The Fair Credit Reporting Act.

Companies that fail to heed these laws could be risking costly fines. In some cases, debts owed to them could be discharged. Debt collection can be a difficult process, but it is very important for any business handling debt collections to fully understand this law.

Understanding The Fair Credit Reporting Act

The Fair Credit Reporting Act states that consumers have rights concerning the accuracy of credit information about them contained in their credit report. It also states that businesses are responsible for the accuracy of the information contained in these reports to the best of their ability. It is important that businesses understand how this impacts debt collection.

In the event your business receives a complaint from one of the credit bureaus (TransUnion, Experian or Equifax), you then have a 30-day period to verify that the debt owed is valid, or it has to be removed from the individual's credit report, according to The Fair Credit Reporting Act.

In regards to debt collection, The Fair Credit Reporting Act is crucial to understand. If you file an inaccurate claim, you face possible legal ramifications if done so intentionally. Moreover, The FTC can possibly limit your abilities to file future claims.

The Fair Credit Reporting Act does work on behalf of your business though. As long as the debt collection is accurate, it should be utilized by the business to ensure that other businesses know that this individual failed to make payment. Any business will want to know what to expect from a potential debtor before working with them.

More Important Facts

For any businesses or associates handling debt collection, there is much to know about the Fair Credit Reporting Act. Businesses that supply information to the consumer reporting agencies are responsible for submitting only accurate information. The law was updated to expand the rights of the consumer.

Consumers have the right to know what is contained in their credit report. They can file a request with the credit reporting agencies. During that process, if it contains any information deemed inaccurate, such as missing or wrong account information, debt collection activity, or erroneous history, the business has to offer proof of the accuracy of the debt, or it has to be removed from the credit report. The Fair Credit Reporting Act places this burden of proof on the business claiming the owed debt.

Negative information on these consumer reports can remain for up to seven years. Bankruptcies are an exception, in that they will remain for ten years. Criminal convictions, information reported in response to an application for a job with a salary that is higher than $75,000 or any information in regards to an application of more than $150,000 can remain for the lifetime on the report. Understanding the requirements of the business to file only accurate information due to the Fair Credit Reporting Act is critical for any business owner, noting debt collection or other requirements.

Also, discover more important facts and resources on debt collection laws, as well as collection agencies options.

Related posts:

1. Credit Card Debt Consolidation - How to Get Rid of Credit Card Debt in No Time
2. Credit Card Debt – All that You Have to Know
3. Debt Management by Choosing Credit Cards Properly
4. How to Get Credit Card Debt Collectors to Focus Their Energy Elsewhere
5. How To Pay Off Your Credit Card Debts