Ohio debt collection law
To make up for their shortage of resources to fulfill their variable needs, people approach different agencies for financial help. At times, due to the urgency and the severity of the situation they are in, people tend to compromise on the reputation or the motives of the institution they take debt from. This may help them overcome the immediate mess that they are in, but will drive them into a bigger one as the date of repayment of the loan gets near. If you are not in a position to pay back in time (which is the common case with the high interest loans), the company will not leave any stone unturned to make you repay the loan somehow, with their collection tactics'. A number of cases are being reported each year about the methods harassment of the collectors towards their customers.
To regulate the collection practices employed by the collection agencies and to provide respite to the common people, Ohio, as with most other states in the country, has statutes in place. These statutes are applicable to original creditors rather than the national agencies and collection attorneys, whose activities are regulated by the federal law using the Fair Debt Collection Practices Act (FDCPA).
FDCPA: FDCPA forbids the use of various methods of harassment by the collection agencies towards the debtors during the collection process. Debts covered under this act include personal and family debts like the money borrowed for buying vehicles, expenses for health care etc.
According to this act, a collector should contact you either in person, on phone, mail etc, only at reasonable times and places, unless with your permission otherwise. Also, the collector may contact only your attorney, if you have one, and nobody else for matters connected with collections. After he contacts you, the collector must send a notification to you, which should denote the amount of money you owe, the name of the person you owe the money, and the action that you may take if you are sure that you don't owe the mentioned amount to the creditor named in the notice. The debt collector is also bound not to reveal the fact that you owe money, to a third person.
Although agencies which violate the FDCPA regulations can face serious fines and other punishments, a number of cases are being found where the rules are violated blatantly, possibly due to the insufficiently trained collectors or due to the complacency of such collection agencies that they would get over the penalties without any serious damage to themselves. FTC (Federal Trade Commission) has in fact taken the required actions against firms which are found to neglect the regulations and get on with their harsh methods of collection.
If you or your family members are subject to harassment or abusive treatment from the debt collectors, you may be eligible of compensation worth $1,000 or more according to the law. You may keep ready with you all the documents like letters and documents received from the collector as well as record and save the messages over phone and internet as proofs against the agency.
Definition of collection agency: As concerned with the law, a collection agency refers to an individual or group of individuals, who undertake collections of so-called debts owed to another person, in return for monetary benefits or other compensations. Persons who work for institutions like banks, trusts, credit union etc, whose collection processes are related directly towards the operation of another enterprise are not included under the list of collection agencies.
Regulations for collection agencies as per the Ohio state statutes:
- A collection agency which works in Ohio may assume responsibility of accounts, bills and other documents of liability of another person, for purposes like billing, collecting or filing a case in its name itself as the party concerned.
- A collection agency cannot begin legal proceedings related to the collection of assigned account, bill or other proofs of liabilities as long as the assignment meets the following requirements:
- The execution of the assignment was done voluntarily and with the approval of the individual who availed the services of the collection agency.
- It was not required by the agency to list the account, bill or other proofs of liability, with the agency, as a pre condition.
- The assignment was attested by a legal document other than those provided towards purposes of listing the above mentioned documents of evidence. The agreement should contain the date the assignment was made and any fees paid for the same, and should clearly empower the agency to refer the documents of proof of liability to an attorney who practices in the state, to begin the legal proceedings. The agreement should also reveal the fact that the collection agency may merge the assigned account and other documents of liability with those of other creditors, for the purpose of filing a suit against a debtor(s).
- The creditor's account managed by the agency relating to the assigned account or other evidences of liability was cancelled on the date when the agency was assigned to.
- A collection agency may initiate legal proceedings of an assigned account or other evidence of liability in a court situated in the same county where the debtor's residence is, or in the case of co-debtors, a county where at least one of them resides.
- A collection agency shall not start any legal proceeding unless it presents itself thru a lawyer who is permitted to practice law in Ohio.
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