By: Tyler Rice
COO at Aldous & Associates PLLC
As a result of the recent economic crisis that has affected us all, in 2010 the US congress created the Consumer Financial Protection Bureau (CFPB). The CFPB has a direct mandate to govern all consumer debt collection efforts. This applies to many in the Fitness Industry, because most likely, you have a third party collection effort attempting to collect on your RFC accounts.
Collection Law Firms and Agencies work on the RFC files in a heavily regulated environment. Because these are your accounts, you ought to be knowledgeable of the rules and regulations your third party needs to obey. Understanding these guidelines will also empower your team when RFC members try to make excuses or unlawful claims.
In order to collect more money on RFC accounts, you need a third party. You should ensure that your third party is not a liability to you and is fully compliant with all the rules. Also, make sure your third party is authorized to collect in your geographic location. Many states have uniquely specific laws regarding consumer debt collection.
All debt incurred from gym memberships is governed by the federal Fair Debt Collection Practice Act (FDCPA). Any person who regularly attempts to collect gym membership debt for another institution other than its own must abide by the FDCPA.
Some of the main points of the FDCPA are:
- Types of Communication Only between 8:00 AM and 9:00 PM in the debtor’s time zone
- Restrictions on calling cell phones or place of employment
- Collectors must provide a written notice of the debt containing specific information
- If debtor desires efforts to stop, he/she must send written notice to have all collection efforts stopped
- No Harassment (calling repeatedly or multiple times a day), Abuse (use of obscene, profane, or other abusive language), False Threats (not intend to follow through on threat), & Oppression (belittle or threaten use of violence)
- Contacting a debtor and attempting to collect debt while abiding by the above rules is NOT abuse, it is holding the debtor responsible for their legal obligations.
- False or misleading representation of efforts (pretending to be Government office or lawyer), inaccurate amount of debt & fees (collecting any dollar amount other than true balance or charging fees not authorized by signed agreement) is prohibited
Your third party collection effort is vital to your bottom line. Knowing this information will make you as an informed steward over the RFC accounts and better positioned to manage the relationship with your third party.