Consumer Rights in Debt Collection

August 28, 2014

In today’s economy, debt is a fact of life for millions of people. This is evidence by statistics such as those from a Corporation for Enterprise Development study, which shows that 44 percent of Americans have less than three months’ worth of savings. Statistics like this make it imperative to keep people informed about their rights when it comes to dealing with debt collectors.

Several years ago, the American Collector Association (ACA) created a website called Ask Doctor Debt to help educate consumers on their rights. While headlines about abusive debt collection practices grab public attention and scrutiny, the untold story is just as powerful and not well publicized.

A 2014 ACA survey shows that a total of $55.2 billion was recovered from consumers on behalf of creditor and government clients. The collection of consumer debt also provides a valuable benefit to American households by returning an average savings of $479 per household and keeping the costs of goods and services lower. Indirectly, the industry influenced creation of a total of more than 230,000 jobs with a payroll of $12.4 billion.

In addition to providing a valuable service to the economy, collection agencies also have an obligation to ensure compliant collection practices outlined in the Fair Debt Collection Practices Act (FDCPA). In this article we’ll discuss a few of these requirements and how the DAKCS solutions assist in ensuring compliance.


Right to privacy and freedom from harassment is a paramount rule of the act that governs debt collectors. In other words, it states that a debt collector may not contact a consumer at inconvenient times or places, such as before 8 in the morning or after 9 at night, unless the consumer agrees to it. DAKCS builds compliance by utilizing time zone tables that prevent contact outside of the approved calling times.

Collection agencies must send a written “validation notice” indicating how much money is owed within five days of initial contact. This notice provides vital information such as the creditor amount of the debt and the procedure to follow to dispute the debt. The system can be configured to generate this notice when an account is listed. Information can also be customized according to the type of account and the needs of the client. In addition, the system provides integrated communication with major Credit Bureaus to update changes to consumer credit reports including disputed debts.

When a consumer makes a payment to a debt collector and has more than one outstanding debt listed with that agency, they have the right to select where that payment will go. This includes the right to insist that the payment not go to a debt that they believe they do not owe. The DAKCS system provides collection agencies with tools to distribute payments as agreed, thereby optimizing payment efficiency and building trust in taking care of debts.

Ensuring consumer protection from unfair collection practices is more important than ever in today’s economy. The U.S. economy is built upon the premise that those who extend credit have the expectation of being repaid. Collection agencies serve an important role in this premise. Helping them ensure compliant practices is a small part of the commitment we make to our customers and to consumers.

Lex Patterson, CEO DAKCS Software SystemsLex Patterson joined the DAKCS team in 1988. In 2006, he was named President and has worked to cultivate new markets, enhance product offerings, connect people, cut costs, and further DAKCS’ legacy of delivering astonishing customer service. He has a deep interest in technology and the ARM business, but understands that the relationships developed through interaction with people are really how business gets done. An avid fly fisherman, photographer and motorcycle enthusiast, Lex enjoys the great Utah outdoors.

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