From the year 1977 California had certain laws that protected the interest of consumers from unethical practices of unscrupulous debt collectors. Rosenthal Act was initiated in 1977 which is now strengthening Fair Debt Collection Practices Act in California. These laws regulate the methodologies of both original and secondary debt collection practices. They lay down strict instruction and guidelines of colleting debt in the proper way. They also clearly describe and categorize what methods and approaches of debt collection agencies would be deemed as unethical or illegal pertaining to debt collection efforts. There is procedure that ought to be followed by a debt collector right from the time of his first contact with a debtor.

 A creditor has all the right to sell an account of a debtor to a collection agency at a discount price. Thereafter, the collection agency pursues the debtor in their effort to collect the amount of debt. Many times original creditors do not intimate the debtor about selling of his account. As per law, creditors in California do not need to inform a debtor about this account transfer. But, the only exception is with regard to Health Clubs. Health clubs are obligated to inform a debtor about the selling of their debt accounts.

Debt collection agency may contact a debtor but not before 8 am in the morning and 9 pm in the evening. A collection agency must tell the purpose of calling to the person on opposite end of the line. After telephonic conversation, it is customary on part of the debt collector to send a mail to the debtor detailing the status of the debt, unpaid balance along with ways to dispute it.

Once the debtor is handed over the letter or mail from the collection agency, he is within his rights to dispute it. The debtor will dispute asking them to show proofs of original agreement. Then the collection agency is obligated to reply him and substantiate the validity of the debt by furnishing documents of proofs within 1 month’s time. Any unnecessary delay will only complicate the situation. If the dispute remains unsolved, both parties can take recourse to law to solve the issue.