Debt collection agency under fire after FDCPA violation

by Debt collection agencies are a useful resource for organizations that want to recover outstanding amounts from debtors. However, precautions must be taken to follow the law, specifically the Fair Debt Collection Practices Act (FDCPA), and state regulations. Failing to adhere to these policies can land some agencies in legal trouble.
 The Southeastern Texas Record reports that Paul Smith, of Plano, Texas, has filed a lawsuit against NCC after representatives from the agency contacted Smith's grandparents in regards to his outstanding medical debt. Smith also claims that agents contacted him numerous times, even after he sent a cease-and-desist letter. The suit alleges that NCC told the plaintiff that failure to pay the debt would result in legal action being taken, which Smith says violates the FDCPA. On the other hand, debt collection agencies have recovered large amounts from debtors for many businesses and organizations legally. According to the Virginian-Pilot, Portfolio Recovery Associates Inc. recently announced a 25 percent increase in profits in the second quarter. The Norfolk-based company reported its net income at $32 million, with a total of cash collections at $232.4 million, which represents a 32 percent rise from last year's amount.