Small businesses are not exempt from the Fair Credit Reporting Act (FCRA). Filing a complaint is not required with the FCRA. However, it is always good to know what you are getting into and what your rights are. Filing a complaint about anything, does not mean you are doing anything illegal. It means that you are asking the FCRA to remedy the situation in some way so you can get your credit reports and fix any inaccuracies they may find.
First, are small businesses exempt from FCRA? The short answer to this question is no. For years, the FCRA has said small business organizations are not subject to the same laws as many large corporations. However, in 2021 the U.S. House and Senate passed and implemented the Fair Debt Collection Practices Act (FDCPA) which changes the law dramatically.
The new law affects even the smallest of companies. For example, if a small business is collecting late or over-limit charges on credit cards and does not receive permission from the card company, the small business may be subject to the same laws as the largest collection agencies. The new law requires all collection agencies to notify the card companies within 30 days of a complaint. They are also required to provide written notice to the consumer and give them an opportunity to opt out of the program.
Are small businesses exempt from FTC laws for debt collection? In most cases, yes. Under the new regulations, the collection of debts by a small business is considered a low priority service and therefore is not covered by the same laws as larger businesses. A small business may, however, use a FCRA compliant in order to receive an exception to this regulation.
The basic function of a small business is to provide goods and services to customers at a fair and reasonable price. A reasonable price is one that reflects the expenses involved in producing the product or service and does not unreasonably tie up funds that would otherwise be available to the customer. If a small business receives a complaint, they should not consider accepting the complaint until they have taken steps to investigate the complaint thoroughly.
Do collection agencies currently use FCRA to collect debts owed by small businesses? No, not currently, but it may soon become their method of choice. As the economy continues to recover and more consumers continue to fall behind on their credit card bills, more FFCA compliant (FTC) companies will likely see business boom in the near future. Some believe that credit card companies are less concerned about consumer rights under the FCRA than they are in profit. Credit card companies make billions of dollars each year from interest payments and late fees. It stands to reason that the FTC would like to make money off of these losses.
How do I find out if my small business is exempt from FCRA? You can check with the attorney general's office, which regulates all U.S. states. Small business owners can also request information from the National Consumer Law Center, which provides a directory of such organizations for a fee. If your state or county does not have a consumer law center, you can also search the internet for “compactions” or “free publications”. A Compact or Free publication is not considered public domain, so proceed with caution.
Are small businesses exempt from FFCRA? Yes, they are. Every United States citizen is protected by the Fair Credit Reporting Act. This includes debt collectors and collection agencies, who must stop contacting or threaten to contact a debtor for unpaid debts – even for something as innocent as a birthday card the debtor never received.
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