Commercial-Debt Collection Statutes for OHIO:
(A)(1) As used in this section, “collection agency” means any person who, for compensation, contingent or otherwise, or for other valuable consideration, offers services to collect an alleged debt asserted to be owed to another. Ohio Stat. Ann. § 1319.12(A)(1) (West, WESTLAW through 2005 File 36 of the 126th GA (2005-2006) apv. by 8/26/05, and filed with the Secretary of State by 8/26/05).
As used in sections 1345.01 to 1345.13 of the Revised Code:
(A) “Consumer transaction” means a sale, lease, assignment, award by chance, or other transfer of an item of goods, a service, a franchise, or an intangible, to an individual for purposes that are primarily personal, family, or household, or solicitation to supply any of these things. “Consumer transaction” does not include transactions between persons, defined in sections 4905.03 and 5725.01 of the Revised Code,
and their customers; transactions between certified public accountants or public accountants and their clients; transactions between attorneys, physicians, or dentists and their clients or patients; and transactions between veterinarians and their patients that pertain to medical treatment but not ancillary services.
(D) “Consumer” means a person who engages in a consumer transaction with a supplier.
Ohio Stat. Ann. § 1345.01(A), (D) (West, WESTLAW through 2005 File 36 of the 126th GA (2005-
2006) apv. by 8/26/05, and filed with the Secretary of State by 8/26/05).
(2) “Collection agency” does not mean a person whose collection activities are confined to and directly related to the operation of another business, including, but not limited to, the following:
(a) Any bank, including the trust department of a bank, trust company, savings and loan association, savings bank, credit union, or fiduciary as defined in section 1339.03 of the Revised
Code, except those that own or operate a collection agency;
(b) Any real estate broker or real estate salesperson, as defined in section 4735.01 of the Revised
(c) Any retail seller collecting its own accounts;
(d) Any insurance company authorized to do business in this state under Title XXXIX of the
Revised Code or a health insuring corporation authorized to operate in this state under Chapter
1751. of the Revised Code;
(e) Any public officer or judicial officer acting under order of a court;
(f) Any licensee as defined either in section 1321.01 or 1321.71 of the Revised Code, or any registrant as defined in section 1321.51 of the Revised Code;
(g) Any public utility;
(h) Any person registered to sell interment rights under section 4767.031 of the Revised Code. Ohio Stat. Ann. § 1319.12(A)(2) (West, WESTLAW through 2005 File 36 of the 126th GA (2005-2006) apv. by 8/26/05, and filed with the Secretary of State by 8/26/05).
What is the Fair Debt Collection Practices Act?
The U.S. Congress enacted the FDCPA in 1977 and added it to the Consumer Credit Protection Act in 1978. Its purpose is to eliminate abusive practices of third-party debt collectors. To that end, the Act establishes guidelines for the conduct of debt collectors, defines the rights of consumers, and prescribes penalties for violations.
The FDCPA defines “debt collectors” as “any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debt … asserted to be owed or due another.”
In other words, “debt collectors” are defined as third parties collecting for a creditor. (As of a 1986 amendment, the FDCPA definition of “debt collector” also includes attorneys who collect debts on a regular basis.)
“Consumers” and “debt” covered under the FDCPA are defined as specifically referring to personal, family or household transactions. Therefore, debts owed by businesses or by individuals for business purposes (commercial debts) are not subject to the FDCPA.
So, if the FDCPA does not apply to commercial debt collection by third parties, how are commercial collectors regulated?
There are no U.S. federal laws, similar to the FDCPA, that regulate third-party commercial (business-to-business) debt collection or provide guidelines for the conduct of commercial debt collectors.
Who is protecting the rights of commercial creditors and debtors?
Commercial Collection Agency Association
The premier body governing the activities of commercial debt collectors is the Commercial Collection Agency Association (CCAA), an arm of the Commercial Law League of America (CLLA). These organizations are not government bodies, nor do they have any jurisdiction over non-members. However, both require high standards of practice and ethics in order for a commercial collection agency to become a certified member.
The Commercial Collection Agency Association was established in 1972 to “improve the quality and reputation of the commercial collection industry.” It currently has more than 200 members. Approximately 100 core members represent the most prestigious commercial collection agencies in the United States.
The CCAA is an arm of the Commercial Law League of America (CLLA), the oldest creditor’s rights organization in the country established in 1895.
Membership in the CCAA
Members of the CCAA are the only collection agencies in the United States certified by the Commercial Law League of America. In order to obtain certification, the agency must meet rigorous criteria.
- The agency must have been in business at least four years prior to application for membership.
- 80% of the agency’s business must be commercial (business-to-business).
- The agency must maintain a separate Trust Account into which all monies belonging to creditors are placed. This Trust Account is reviewed twice annually by the Executive Director of the CCAA.
- The agency must agree to abide by the CCAA Code of Ethics, which sets ethical standards for dealing with creditors, debtors and attorneys.
- Executives of the agency must meet continuing educational requirements and attend regular CCAA meetings. The member agency must complete sixty continuing educational credits annually.
- The agency must post a surety bond of at least $300,000 for the protection of the creditors it serves.
- One person in the agency must also be a member of the Commercial Law League of America.
- The agency must agree to random periodic site visits from the CCAA Executive Director.
- The agency must be in compliance with all local and state licensing requirements and regulations governing commercial collection firms.
Primarily, the Commercial Law League of America and its Commercial Collection Agency Association have assumed responsibility for looking after the needs and rights of creditors and their customers/debtors. State governments that require licensing and bonding of commercial debt collectors also play an important role.
However, since membership in the CCAA is not compulsory, and some firms may provide collection services in a state but never get licensed, it is up to creditors to ensure they (and their debtors) are receiving the most ethical and highest level of commercial collection service.
How? Check to see if your Agency is both a member of the Commercial Collection Agency Association and therefore certified by the Commercial Law League of America, and is licensed in the U.S. states requiring such licensing.
Burt And Associates is a member of both CCAA and CLLA. Also, we are licensed in bonded in all 50 states (where required).