Commercial Debt Collection Statutes for ALABAMA:
ALABAMA-Definitions Under Alabama law, any person or entity employing agents to solicit claims for collection from individuals, firms, or corporations within the state is considered a collection agency. This designation is subject to specific regulations outlined in Alabama Code § 40-12-80. However, this definition excludes individuals or entities that are not classified as “debt collectors” under the federal Fair Debt Collection Practices Act (FDCPA).
ALABAMA-Exemptions Alabama state law does not provide specific exemptions regarding commercial debt collection.
What is the Fair Debt Collection Practices Act?
The U.S. Congress enacted the
FDCPA in 1977, incorporating it into the Consumer Credit Protection Act in 1978. The FDCPA was established to curb abusive practices by third-party debt collectors and set forth clear guidelines for their conduct. It also outlines the rights of consumers and stipulates penalties for violations.
Definition of a Debt Collector: The FDCPA defines a “debt collector” as any person using interstate commerce or mail to collect debts on behalf of another party. This includes third-party agencies and attorneys who regularly collect debts.
Scope of the FDCPA: The FDCPA exclusively covers personal, family, or household debts. Business or commercial debts are not subject to FDCPA regulations.
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 (CCAA)
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, with approximately 100 core members representing the most prestigious commercial collection agencies in the United States.
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.
Certification Requirements:- 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). 
