In the U.S., the Fair Debt Collection Practices Act (also known as FDCPA) was created in 1978 as a part of the Consumer Credit Protection Act. Entrepreneurs use this statute when trying to improve their cash flow as a guideline for conducting debt collection practices. However, the law doesn't directly affect entrepreneurs- or "original creditors" as referred to in the legal documents- but rather the companies entrusted by business owners to collect the debts, such as collection agencies.
How The Fair Debt Collection Statute Affects Entrepreneurs
Having said that, some states have enacted similar laws for original creditors, and as the statute has matured over the years, some adaptations have been made to redefine what exactly a debt collector is. For instance, lawyers have been considered debt collectors under the law since 1986. So although many entrepreneurs may not specifically be covered by the FDCPA when collecting their own debts (as opposed to contracting out a company to perform fair debt collection on their behalf), it is still wise to use the same guidelines to avoid legal ramifications.
