Debt Recovery

• Are you interested in hiring an easy to use collection agency with extensive experience in recovering dues for credit unions of all sizes?

• A collection agency that adheres to the same stringent data security standards required by banks and credit unions (GLBA compliance), ensuring your customer data remains secure and your organization stays compliant with all federal and state laws.

• Have you implemented a consistent and effective collection process? We understand how to maximize recovery, and in case you are short staffed we can perform low cost fixed fee service by sending low-cost reminder notices to your customers on your behalf.

Credit unions now manage trillions in assets and a large, diverse loan book: auto, cards, HELOCs, personal loans, indirect paper, and small-business credit. With that growth has come:

• More loans rolling into 60/90+ days past due

• Higher net charge-off ratios than in the low-rate years

• Rising delinquencies in auto and unsecured portfolios

• Heavier exam focus on credit risk and third-party oversight

Inside many credit unions, a small team is juggling early-stage calls, repossessions, charge-offs, legal files, bankruptcies, and member service. It’s easy for late-stage, lower-priority accounts to fall through the cracks simply because there aren’t enough hours in the day.

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AR Pain Points Credit Unions Struggle With

A few issues come up again and again when we talk to credit unions:

• Thin internal collections staff – A handful of collectors handling everything from reminder calls to legal files.

• Complex relationships – Co-borrowers, cross-collateralized loans, indirect portfolios, and members with multiple products.

• Overdrafts and fee-driven balances – Small but noisy accounts that can generate complaints and bad reviews.

• Reputation risk – One harsh collection experience can undo years of member goodwill and word-of-mouth.

• Compliance pressure – Examiners expect documented processes, secure data handling, and controlled use of third-party vendors.

These are the reasons many credit unions decide to keep early-stage work in-house, and push tougher, late-stage or charged-off accounts to a specialized agency that understands their environment.

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What a Good Credit Union Collection Partner Looks Like

When you send accounts to an outside firm, you’re not just outsourcing phone calls—you’re trusting them with member relationships. You should expect:

• Bank-level security and privacy (GLBA mindset, secure file exchange, access controls).

• Strong regulatory alignment with FDCPA, FCRA, Reg F, TCPA, and state rules.

• Member-friendly tone – firm but respectful, aligned with your brand and culture.

• Omnichannel outreach – letters, calls, email, text (where allowed), with proper consent.

• Actionable reporting – recovery by product, delinquency bucket, and campaign, so you can show results to leadership and examiners.

A good partner feels like an extension of your AR team, not a black box you hope is doing the right thing.

Serving Credit Unions Nationwide Need a Collection Agency? Contact Us High Recovery rate. Referrals of existing Credit Union clients can be provided if requested.

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Internal Moves That Lower Delinquencies

External collections work best on top of solid internal practices. High-performing credit unions usually:

• Monitor portfolios frequently, not just at month-end

• Reach out early at 15–29 days past due

• Offer realistic, time-bound workout options for short-term hardship

• Educate members about autopay, due dates, and the impact of missed payments

• Segment high-risk groups (indirect auto, higher-risk tiers, repeat delinquents) and decide earlier when to move them to third-party collections

Your collection partner can help refine these strategies so you’re not relying on manual lists, scattered notes, and overloaded staff.

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How a Specialized Agency Works With Your Credit Union

For late-stage and charged-off accounts, a credit-union-savvy agency can:

• Take over outbound campaigns on older auto, card, and unsecured loans

• Handle repossession deficiencies, judgments, and post-charge-off recovery

• Use skip-tracing and other tools within legal limits to locate harder-to-reach members

• Recommend legal action only when it makes economic sense and fits your risk appetite

The tone matters: the goal is to recover what’s owed, explore realistic arrangements where possible, and avoid burning bridges with members you may want to keep in the long run.

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Credit Union Collection Services

Collection Letters Service

• Upfront cost for 5 Collection Letters is about $15 per account.

• Members pay you directly; there are no additional collection fees on these accounts.

• Works best for newer delinquencies (typically under 120 days past due) where a formal third-party letter often gets attention and cures the balance.

Collection Calls Service

• Contingency fee only – you pay a percentage of what’s collected.

• If there’s no recovery, there are no collection fees.

• Best for accounts over 120 days past due, broken promises, repeat delinquents, and charged-off balances that your team doesn’t have time to chase.

• When the balance and circumstances justify it, legal action can be considered through a network attorney, with your approval.

This combination of low-cost letter campaigns plus contingency-based calling helps many credit unions:

• Increase recovery on older loans and overdraft balances

• Lower net charge-offs

• Reduce internal workload on “slow-pay” and skipped accounts

• Protect their community reputation while still enforcing the credit agreement

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The Bottom Line

Credit unions are facing more credit stress, more scrutiny, and higher expectations from members—all at the same time. You can’t afford to ignore delinquent loans, but you also can’t afford to handle them in a way that damages trust.

A well-chosen, compliant collection partner that understands the credit union world helps you protect your loan portfolio, present stronger numbers to your board and examiners, and preserve the human, member-first culture that makes your credit union different in the first place.

Out of thousands of collection agencies in USA, only a few collection agencies offer their customers a dedicated “Client Portal” to manage all the debt collection activity online.

It is a great way to minimize complexities related to working with a collection agency. Our two favorite portals are KinumOrders.com and RocketReceivables.com. Kinum is a relatively lower-cost option for contingency collections. Rocket is backed by a larger collection agency – TSI.

Contact us if you need a good collection agency that also offers a self-service debt collection portal for your unpaid bills.

A self-service portal should be easy to use, yet your collection agency should offer a dedicated sales/support person who can address your needs if you need anything extra.

A secure self-service portal allows clients to do ten major tasks

1. Easily submit new accounts for collections. ( One-by-one, or Uploading in bulk using an excel document)

2. View all the current collection efforts done by the Collection Agency on your accounts.

3. Stop, Update or Pause the collection activity on an account.

4. Generate performance reports and check the recovery rate.

5. Upload debt verification documents if requested by the debt collector.

6. Transfer account from diplomatic to intensive collections.

7. Contact support staff using a standard online ticketing system, instead of calling or emailing support staff.

8. Ability to update login credentials for your client portal.

9. Notify the collection agency regarding any payment that you have received directly from the debtor.

10. Notify your collection agency of any significant updates or disputes regarding the debtor.

A self-service debt for collection portal is convenient and saves a lot of time. It also indicates that the collection agency believes in good customer service and maintains 100% transparency of their collection efforts with customers like you. Such agencies also provide a convenient way for debtors to make online payments using a credit card and in many other ways.

Offering a self-service portal for debt collection is not cheap; it requires hiring several software engineers to develop, hardware costs and efforts needed to keep the data secure. A Collection Agency which does not provide a Self Service Portal to its clients could be keeping its data in the old-fashioned way (in paper format), which is indeed very risky.

It is important to ask if the Collection Agency has got its Self Service Client portal audited for security by a professional security agency. Since you will be sharing a lot of personal data of your debtors, it is essential that they keep it secure.

Just a handful of collection agencies offers Self-Service client portal.

Contact us if you are looking for a good collection agency with a high recovery rate and also provides a self-service portal to their clients to manage and monitor all the debt collection activity.

Electricians & HVAC contractors: stop letting unpaid jobs fry your cash flow

If you run an electrical or HVAC business, your world is full of numbers:

• Service calls in the $250–$600 range

• Panel upgrades and EV chargers at $1,000–$2,500+

• HVAC change-outs and commercial jobs in the $4,000–$20,000+ range

Now add another number: how much of that is 60–90 days past due?

In a typical year, even losing a few jobs each month—say $8,000–$15,000 in unpaid invoices—can quietly drain $100,000+ from a busy contractor.

If you’re doing good work but still chasing money, the problem usually isn’t your trade skills. It’s the way your A/R and collections are set up.

Your debtors are likely be getting chased by several creditors like you, and their financial situation is likely deteriorating with every passing day.  

Serving HVAC/Air Conditioning/Electrical Businesses Nationwide Need a collection agency? Contact us High recovery rates – Low cost – Easy to use

 

Why electrical and HVAC invoices go bad

On paper, it’s simple: estimate, work, invoice, payment. In real life, a few patterns wreck your cash flow.

Residential and light commercial

• Emergency work, no deposit
  Power is out or the A/C is dead. You fix it first and worry about payment later. Once the crisis is over, urgency disappears—for the customer.

• Insurance and warranty confusion
  After storms, surges, or equipment failures, customers assume, “Insurance or warranty will cover it.” When deductibles or exclusions appear, they stall or vanish.

• Landlord–tenant tug-of-war
  Tenants want it fixed. Landlords argue it’s tenant damage. Meanwhile, your invoice sits.

• Extras without signatures
  Extra lights, upgraded fixtures, larger HVAC units—approved verbally on site, never written down. When the higher bill arrives, people act surprised.

Construction and GC work

• “Paid when paid” contracts
  You’re the sub. The GC says they’ll pay when the owner pays. That can easily stretch to 90+ days.

• Retainage and punch lists
  Five to ten percent of every draw is held until “final completion,” which might be months after your electrical or HVAC work is done.

• Slow-pay habits
  Some GCs and property owners simply use subs as interest-free credit. If you don’t push, you’ll always be last in line.

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Simple A/R habits that protect your trade business

Before bringing in a collection agency, tighten the basics. Small changes can save big money.

1. Make payment terms part of every job

• Put clear terms and due dates on every quote and work order.

• For bigger tickets (panel upgrades, full HVAC systems), collect deposits.

• Spell out what happens if invoices go unpaid: late fees, collections, possible lien rights (where applicable).

2. Invoice fast and consistently

• For service work, invoice same day or within 24–48 hours.

• For project work, bill at each milestone instead of waiting weeks.

The longer you wait to bill, the easier it is for customers to delay or dispute.

3. Get extras in writing

• Turn “Can you add two more vents / lights?” into a quick signed change order or digital approval.

• Clear paperwork cuts off most “I didn’t agree to that” arguments later.

If someone ignores you through that entire sequence, they’re not just “busy.” They’re a risk account.

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Liens and bond claims: quiet leverage for electricians & HVAC

You don’t need to become a lawyer, but you should understand your basic tools on projects.

Mechanic’s liens (private projects)

On many private jobs, both electricians and HVAC contractors can:

• Record a mechanic’s lien against the property if not paid

• Make it harder for owners to sell or refinance without dealing with your invoice

Key ideas:

• Most states require preliminary notices and strict deadlines.

• If you miss those dates or file incorrectly, your lien rights may be gone.

Used correctly—and professionally—lien rights can turn a “we’ll pay you later” into a serious conversation.

Bond claims (public projects)

On public work, you usually can’t lien the property, but you can often:

• Make a claim on the prime contractor’s payment bond when you’re unpaid

Again, the rules are technical, but knowing this option exists makes you much harder to ignore.

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When it’s time for a trade-focused collection agency

At some point, chasing money stops being customer service and starts being unpaid office labor.

Common cutoffs many contractors adopt:

• Residential / small commercial:
  If an invoice is 60–90 days past due after multiple reminders, it’s a collection candidate.

• Construction / GC work:
  If you’re nearing lien or bond deadlines with no progress, escalate—legal options, collections, or both.

An electrician & HVAC collection agency is different from a generic shop because it understands:

• Bids, change orders, retainage, and punch lists

• The language of GCs, property managers, and facility directors

• How to be firm without wrecking long-term relationships

Their job is not to scream on the phone; it’s to turn stalled invoices into realistic payment plans or lump-sum settlements while protecting your brand.

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FAQs: collections for electrical and HVAC contractors

How long should I wait before sending an invoice to collections?
For most service and small commercial jobs, once an invoice is 60–90 days overdue and reminders haven’t worked, it’s reasonable to send it to collections. Past 120 days, your recovery odds drop sharply.

Will using a collection agency hurt my reputation with GCs and customers?
Handled poorly, yes. Handled well, no. A professional, trade-savvy agency uses respectful, businesslike communication and payment options. Often, it simply shows that your company treats debt like a serious business issue, not an afterthought.

What should I give a collection agency for an electrical or HVAC invoice?
Provide:

• Signed quotes or work orders

• Invoices and statements

• Change orders

• Proof of completion (photos, inspection approvals, job tickets)

Good documentation is your best friend.

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How Nexa helps electricians and HVAC contractors get paid

If your electrical or HVAC business is always busy but never truly caught up on cash, your collection strategy needs a tune-up.

Nexa is an information portal that helps businesses—including trades like electricians and HVAC contractors—find suitable collection agencies.

• We are not a collection agency ourselves and we don’t collect money from your customers.

• We learn about your job sizes, customer mix, and A/R pain points.

• We then share your collection requirements with carefully shortlisted agencies we believe fit your situation.

• It’s entirely your choice whether or not to work with them.

If you’re tired of wiring panels, installing systems, and fixing emergencies only to chase the money for months, it’s time to change the way you handle overdue accounts.

You keep the power and air flowing. Let the right collection partner help you turn more of that hard work into collected cash.

 

Credit reporting should not be used as a revenge tool or a threat; it is against the debt collection laws. But a creditor whose account becomes seriously past due has the legal right to report the account to Credit Bureaus if he has adequate proof regarding the authenticity of the debt. The top three Credit Bureaus of the USA are Equifax, Transunion and Experian.

Most small businesses do not do Credit reporting themself. When the account is 30 days or more past due, they forward the account to a debt collection agency.

A Collection Agency can report the account to Credit Bureaus after their debt collection efforts have failed and the original creditor wishes to report this delinquency on the debtor’s Credit History report. This entry can stay on the debtor’s credit report for up to 7 years.

There are several laws around Credit Bureau Reporting since it adversely impacts the credit history of debtors or patients. According to the Fair Credit Reporting Act (FCRA), all accounts reported after September 15, 2017, should have Full Name, Address, Full SSN and Full Date of birth. Since collection agencies use skip-tracing services and may also have access to debtor credit reports, they can usually find one or more missing information by reverse lookup using the Debtor’s SSN. For example – if the debtor’s DOB is missing, then a collection agency can find it using the debtor’s SSN.

Although Credit Reporting is a powerful tool, it should be used judiciously. A debtor has his own consumer rights. If an entry has been reported incorrectly to the Credit Bureaus, the debtor can dispute it. In extreme cases, the debtor may even file a lawsuit if corrective actions are not taken on time. If the creditor cannot verify any information, the consumer reporting agency is responsible for removing it. It is better to continue working with the debtor to recover the money than to instruct the collection agency to report the matter to Credit Bureaus at the earliest opportunity.

Benefits of Credit Reporting

Reporting a  debt to Credit Bureaus has some benefits.

1. It indicates to the debtor that you are serious about recovering your money.

2. If you sue the debtor in court, your attorney can tell the judge that despite all efforts, like making calls and credit reporting, the debtor has not paid. Your case can potentially become stronger.

3. Since millions of Americans check their free credit report annually on annualcreditreport.com, it reduces the chances of mistakes and fraud if there has been a credit reporting error by the original creditor or the collections agency. These issues require immediate attention and must be rectified promptly.

4. If a consumer is aware that you do not hesitate to report genuine cases of unpaid bills to Credit Bureaus, it will reduce the occurrence of late payments and defaults.

5. Not just the bad debts, if you report debts paid in time (like car loans, credit card loans, etc), then it motivates the client to make payments promptly because it helps them to establish good credit.

6. Debtors can sometimes agree to pay in exchange for the entry to be removed from his credit history report. However, this approach is not recommended.

Opening an account with a credit bureau has other benefits too. It allows original creditors to check the credit ratings of their prospective clients and for the collection agencies, it helps to compute the probability of getting paid.

Disadvantages of Credit Reporting

1. Once an account has been reported, the debtor’s worst nightmare has come true. He thinks, “Now what? Or What worse can happen?“. The debtor loses the fear as the worse that could have happened to his credit history report has already happened. Credit Bureau reporting as a negotiating tool is off the table now.

2. Incorrect reporting ( incorrect amount or other mistakes ) can have legal repercussions. Not many, but a few debtors may sue back the creditor or the collection agency for damages.

3. Medical debts, once paid off, should be removed from the credit report. This creates more work for the collection agency.

Responsibilities of Original Creditors towards their Collection Agency:
– Inform your collection agency of any payments received promptly
– Inform of any disputes or bankruptcies immediately
– Provide substantiation of all debts assigned at the time of placement or as requested
– Always accurately report the balance and the status of the account

If you are looking for a debt collection agency that can work on your accounts receivable in a cost-effective way; even report your unpaid accounts to credit bureaus if you request them, Contact Us

Debt collections can be quite frustrating and boring if too many customers fail to make payments on time. Your staff has to contact them repeatedly to pay their past-due bills. More significant challenges arise when some of the following issues complicate recovery efforts.

1. Debtor is not traceable:

Every business struggles with the lack of current contact information of their debtors. May be the debtor has moved from his current residence, or your employee made an incorrect entry while typing the data into the system.

Solution 1:
The USPS maintains a database of people who have recently moved. You can request the USPS to inform you of a person’s new address by using USPS ancillary service endorsements.

Solution 2:
Use a professional Skip tracer service. Skip tracing provides the latest residence or business address of any individual. It will also include the latest phone number if available. Advance Skip tracing services are costly, and for a single account check, they can charge anywhere between $25 to $200 per account.

Solution 3:
If you intend to transfer the account to a Collection Agency, they will do it for free as a part of their collections process. They pay a huge amount to professional skip tracers every month and get the volume discount benefit. They get this service for pennies on the dollar.

2. Some accounts may no longer be in business or bankrupt

Creditors cannot try to collect on debts that are discharged due to bankruptcy. Even if a debtor simply files for bankruptcy, the debt collectors are not allowed to continue collection activities while the bankruptcy case is pending in court.

How to find out if someone has filed for bankruptcy?

Solution 1:
Go to: http://www.ncmb.uscourts.gov/content/how-can-i-verify-if-someone-has-filed-bankruptcy
* If you have a PACER account, you can search using the PACER Case Locator.
* You can visit the courthouse and use a public terminal.
* If you know the social security number, you can use the VCIS system. It’s a toll-free call to 1-866-222-8029. See VCIS instructions here.

Solution 2:

Well, simply hire a Collection Agency, they will check it for free as a part of the standard collections process.

3. Debtor Excuses

We have a detailed article on the excuses made by debtors, a pretty interesting article. It will give you several ideas on how to handle all those excuses.

Solution 1:
Instruct someone in your Accounting/AR employee to keep checking with the debtor frequently. The debtor will likely pay when he realizes that collection demands are not going away any time soon.

Solution 2:
Go to the Small Claims Court and get a judgment against the debtor; this may include wage garnishment. If you are lucky, you may get a default judgment if the debtor fails to appear.

Solution 3:
Hire a professional collections agency and let them do all this work for you. They have excellent systems and software in place to periodically contact the debtor.

4. Government Regulations and Laws:

Did you know that the government has many laws which need to be followed when attempting to recover money from a person? In many states, these restrictions apply to the original creditor as well. These laws are designed to prevent Creditors/Collection Agencies from putting unreasonable pressure on debtors. Not following these debt collection laws and regulations can result in getting sued back by the debtor.

Solution 1:
Have your in-house collection specialist keep himself up to date with laws that are applicable to the original creditors too.

Solution 2:
Use a collection agency. The staff of a collection agency is well-trained to follow various Federal and State laws. Check out the Debt Collection Laws in the United States. In case of a mishap (a lawsuit occurs from the debtor’s side), they are fully insured for such situations to protect themself and their clients from a financial loss.

5. Training Staff Regularly

No one likes calling people again and again and insisting they pay their bills. Invoicing people regularly and following up with them after the past-due date requires tremendous patience, discipline, training and a process in place. As time passes by, the debtor gets pretty immune to those reminder notices. Make sure your staff even keeps a regular check of clients who are past due. These cases should not slip away because no one is properly checking.

Solution 1:
Debt collectors are people with great patience and have too many ideas on how to recover money legally. That’s what they do all day long. Debt collectors are regularly trained by their employers (the Collections Agency).

6. Language barrier

Are all your customers English speaking only? Do you have a bilingual staff who can speak their language? Small businesses and medical professionals often serve people whose primary language is either Spanish or Mandarin.

Solution 1:
Find a friend or an employee who can speak the language of your debtor. Explain to him what to talk about and how to respond.

Solution 2:
Transfer the account to a collection agency that employs multilingual staff. Spanish-speaking debt collectors at the minimum.

7. Tax season

Tax filing season ( March to April) is notoriously bad for debt collections. Many people must pay IRS those unexpected taxes or fines.

Solution 1:
On the brighter side, millions of people receive tax refunds. This may include some of your debtors too. Make sure you re-send the invoice during this period as they may clear your bill finally from the extra money they just got back from the IRS.

8. Verification of debt

Debtors often ask Creditors/Collection Agencies to provide all documents related to the debt, which proves the debtor indeed owes the money. Failure to provide adequate documents will lead you to write off this debt. If it takes too long to locate debtors’ data and you have to go through the bundle of files, then it’s time for a procedural change.

Solution 1:
Of course, your AR team should keep documentation properly. If too many physical documents or paper-based files are making your office a junkyard, consider storing documents electronically. There are several companies that help you store documentation safely and well organized. Finding the electronic version of a document will be a huge time saver.

9. Maintaining positive customer relationships

Most businesses do not want to lose customers or aggravate them just because they have failed to make payments this time. They may give more business in the future after their situation improves. They can potentially spread negative word about your business in the community or online.

Solution 1:
Instruct your staff to deal with debtors diplomatically and with respect. Even if they feel frustrated at times, it is better to end the call that very moment on some pretext, rather than continue to talk and yell at each other. Calling up at a different time could very well be fruitful as your debtor’s mood may be more cheerful.

Solution 2:
The staff of Debt Collection Agencies is well-trained to deal with debtors diplomatically. Try sending Collection Letters first, as they are the best way to maintain better relations with your customers.

10. Pause Collection Activity when the Government notifies

During the coronavirus pandemic, several states prohibited debt collection activity in their states. Similarly, when hurricanes, wildfires, earthquakes, floods or tornados arrive in a region, collection activity needs to be paused. To keep track of all such events, a collection agency must be on the lookout for these notifications.

Hiring a collection agency

Collection Agencies have been around for decades and recover billions of dollars every year for their clients, which would have otherwise resulted in a 100% loss. Collection agencies subscribe to several services like Skip Tracing, Bankruptcy Screening, etc which you would be reluctant to buy. You can never match the cost and efficiency of a collection agency. It is recommended to use the Collection Letters service for accounts less than 120 days past due, and the Collections Calls service for accounts over 120 days past due.

The Ultimate Guide to USA Debt Collection Laws: Compliance, Statutes, and Recovery

Navigating the landscape of debt recovery in the United States is like walking through a minefield. For business owners and creditors, the goal is simple: recover overdue revenue. However, the path to payment is governed by a complex web of federal acts and state-specific regulations.

One misstep—an accidental call too early in the morning or a letter sent to the wrong address—can result in lawsuits that cost far more than the original debt.

At NexaCollect, we believe that knowledge is leverage. This guide breaks down the essential collection laws you must know and explains why partnering with a nationwide, licensed agency is your best defense against liability.

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1. The Federal Framework: The “Big 6” Collection Laws

Federal laws set the baseline for debt collection across all 50 states. While these primarily target third-party collection agencies (like us), original creditors must adhere to many of these standards to avoid “Unfair, Deceptive, or Abusive Acts or Practices” (UDAAP) claims.

A. The Fair Debt Collection Practices Act (FDCPA)

This is the “constitution” of debt collection. Enacted in 1977, it prohibits abusive practices.

• Communication Limits: Collectors cannot call before 8:00 AM or after 9:00 PM (local time).

• Harassment: No threats of violence, use of profane language, or repeated calling to annoy.

• False Statements: Collectors cannot claim to be attorneys or government officials if they are not, nor can they threaten legal action they do not intend to take.

• Validation: The debtor must be sent a written “Validation Notice” within 5 days of initial contact, detailing the debt and their right to dispute it.

B. The Fair Credit Reporting Act (FCRA)

This law governs how debt is reported to bureaus (Equifax, Experian, TransUnion).

• Accuracy: Creditors and agencies must report accurate information.

• Disputes: If a consumer disputes a debt, the furnisher of information must investigate and correct errors within 30 days.

• 7-Year Rule: Most negative credit information must be removed after seven years.

C. The Telephone Consumer Protection Act (TCPA)

In the modern era, this act is a major source of litigation.

• Robocalls: It strictly restricts the use of auto-dialers and pre-recorded messages to cell phones without express consent.

• Revocation: Consumers can revoke consent to be called at any time.

D. Servicemembers Civil Relief Act (SCRA)

This protects active-duty military personnel.

• Interest Caps: Interest on pre-service debts is often capped at 6%.

• Legal Protections: It creates high hurdles for obtaining default judgments against active servicemembers.

E. Gramm-Leach-Bliley Act (GLBA)

While primarily for financial institutions, this affects collection by mandating strict privacy rules regarding how non-public personal information (NPI) is shared and protected.

F. HIPAA (Medical Debt):

For healthcare providers, the Health Insurance Portability and Accountability Act (HIPAA) mandates that collection agencies must sign a Business Associate Agreement (BAA) and strictly limit the use of Protected Health Information (PHI) to the minimum necessary for recovery.

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2. State-Specific Nuances: Where It Gets Tricky

Federal law is the floor, not the ceiling. Many states have enacted “mini-FDCPAs” that are stricter than federal law.⁷ A nationwide agency must use software that automatically adjusts to these local rules.

California: The Rosenthal Act

• Scope: Unlike the federal FDCPA, California’s Rosenthal Act applies to original creditors as well as third-party agencies.

• Recording: California is a “two-party consent” state, meaning you cannot record a collection call unless the debtor agrees.

New York: Consumer Credit Fairness Act

• Statute of Limitations: Recently reduced from 6 years to 3 years for consumer credit transactions.

• Notice: Requires specific, detailed notices to be mailed to debtors before and during the legal process.

Texas: Texas Debt Collection Act (TDCA)

• Bonding: Third-party agencies must file a surety bond with the Texas Secretary of State.

• Fee Limits: Strict limits on adding collection fees unless explicitly authorized by the contract and state law.

Massachusetts: Frequency Limits

• Strict Contact: Collectors generally cannot initiate a communication with a debtor (via phone or text) more than twice within a seven-day period.

Florida: FCCPA

• Consumer Protection: Prohibits communicating with a debtor if the creditor knows the debtor is represented by an attorney. Violations carry statutory penalties even without actual damages.

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3. The Statute of Limitations (SOL) Guide

The Statute of Limitations is the time period a creditor has to file a lawsuit to collect a debt. Once this expires, the debt is “time-barred.” You can still ask for payment, but you cannot sue.

Note: B2B (Written Contracts) often have longer SOLs than Open Accounts (Credit Cards).

State	Open Account (Credit Card)	Written Contract	Oral Contract
California	4 Years	4 Years	2 Years
Florida	4 Years	5 Years	4 Years
Georgia	4 Years	6 Years	4 Years
Illinois	5 Years	10 Years	5 Years
New York	3 Years	3 Years	3 Years
Texas	4 Years	4 Years	4 Years
Pennsylvania	4 Years	4 Years	4 Years

(Disclaimer: Laws change frequently. Always consult a legal professional for specific case advice.)

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4. Why You Need a Full-Spectrum, Licensed Agency

Given the complexity of the laws above, managing collections in-house is risky. Here is why partnering with NexaCollect is the smartest move for your bottom line and your brand.

A. Nationwide Coverage & Licensing

We are licensed and bonded to collect in all 50 states. If your debtor moves from Texas to New York, you don’t need a new agency. We follow them, adjusting our compliance protocols automatically to match their new jurisdiction.

B. Protecting Your Reputation (High Google Ratings)

The old “break their knees” approach to collections is dead. It results in lawsuits and 1-star reviews that kill your future sales.

• Our Approach: We view ourselves as an extension of your customer service. We use diplomatic, firm, and respectful mediation to recover funds. This is why our agency maintains high Google ratings—we treat people with dignity.

C. The Full Spectrum Model: Fixed-Fee to Legal

Most agencies force you into a 40% contingency fee immediately. We don’t. We offer a tiered approach designed to save you equity:

1. Step 1 & 2 (Fixed-Fee): For a low flat rate (e.g., $15/account), we act as a third-party intervention. You keep 100% of the money recovered here.

2. Step 3 (Contingency): If they don’t pay, we escalate to intensive calls. We only charge a percentage (typically 40%) if we collect.

3. Step 4 (Legal): If the debtor has assets but refuses to pay, our network of specialized attorneys can litigate.

D. Commercial vs. Consumer Expertise

Laws for collecting B2B (Commercial) debt differ vastly from Consumer debt. The FDCPA primarily protects consumers. Commercial collections allow for more aggressive strategies. Our team is trained to distinguish between the two, maximizing pressure on businesses while staying compliant with consumers.

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Summary

Debt collection in the USA is not just about persistence; it’s about precision. With the FDCPA, TCPA, and state laws like the Rosenthal Act watching every move, you need a partner who understands the rules of the game.

NexaCollect offers the compliance shield you need with the recovery results you deserve.

Ready to recover your revenue without the risk?

Contact Us Today for a Free Quote