CFPB Proposes Changes to Fair Debt Collection Practices Act

A red wallet with money spilling out as the main image on an article about the Fair Debt Collection Practices ActNews is abuzz about changes to how “debt collectors” can contact consumers to collect debts. Texts, emails, voice messages and more are part of the changes to the Fair Debt Collection Practices Act proposed by the Consumer Financial Protection Bureau.

Federal and local state statutes regulate consumer debt collection. You should be aware of what the proposed changes are, even if you are a B2B company that doesn’t do business with consumers, as it may affect your company or you, individually.

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Who Pays the Credit Card Fees on Debt Payments?

A hand swiping a credit card through the processor.More debtors than ever are paying by credit cards or through apps linked to their credit card, but these come with a processing fee. Who pays the credit card fees on debt payments?

Until recently, New York banned merchants from burdening customers with a “surcharge fee” when they paid by credit card. The result left suppliers and service professionals paying the fees. Only six states in the U.S. ban merchants from passing the processing fee to consumers.

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Should I Accept a Promise of Payment On an Outstanding Balance From Client’s Future Sales?

Image of two men shaking hands.What happens when a client wants to pay an outstanding balance from their future sales or services? Working with that customer had previously been profitable, but they’ve experienced cash flow issues. For those who wish to continue doing business with a customer who seems to be having difficulties, you need to know how to best position yourself to obtain payment on the aged balance as well as any future sales.

Is there an arrangement that will ensure repayment to you on an outstanding balance and provide future profit from the same customer?

Take for example a client of ours that is a chemical manufacturer. Their customer needs a resin to complete a product made especially for the automotive industry. Their customer has become a slow-paying customer and is way past the agreed-upon terms. They are, however, making weekly installment payments. Without the client’s product, the customer will not be able to fulfill future orders already secured by the automotive company. Having explained that to the resin manufacturer, with our assistance they arrived at the following arrangement: Continue reading “Should I Accept a Promise of Payment On an Outstanding Balance From Client’s Future Sales?”