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Commercial Collection Laws by State Summary

Commercial Collection Laws By State: A Guide for Businesses

Businesses have specific legal rights when it comes to seeking repayment from customers on outstanding debts, as do the consumers from whom they are attempting to collect. These rights are designed to protect both parties while also supporting the need for a satisfactory solution.

What businesses need to understand about debt collection, however, is that the entire process is regulated by both federal and state laws, and that failure to comply with these regulations can compromise their ability to obtain reimbursement.

On a federal level, the Fair Debt Collection Practices Act (FDCPA) governs how and when collection agencies can interact with debtors throughout the collection process. But there are also debt collection state laws that can apply depending on where the business, collection agency, and debtor(s) are located.

It is wise for businesses to familiarize themselves with these state collection laws as failure to comply could result in lawsuits, penalties, and other undesirable outcomes. We’ll provide a breakdown of debt collection laws by state in just a moment. But first, let’s cover some of the basics.

What Are Commercial Collection Laws?

Commercial collection laws are a series of legislative acts that govern the methods and practices by which a business can pursue compensation. These legislative acts include:

The CCAA Code of Ethics

The Commercial Collection Agencies of America (CCAA) Code of Ethics is a set of standards put together by an alliance of commercial collection agencies, creditors’ rights attorneys and law list publishers. The code is upheld by all members and thus it is always advisable for businesses to hire agencies who are members of the CCAA.

The Fair Debt Collection Practices Act (FDCPA)

The Fair Debt Collection Practices Act (FDCPA) is a federal law amendment that is upheld by the United States government. It’s primary purpose is to prevent abusive practices within the consumer debt collection industry.

State-Specific Debt Collection Regulations

In addition to adhering to the FDCPA, individual states can implement their own debt collection laws. These laws typically apply to consumer debt collection agencies and are maintained at the state level, free from federal administration.

Major State Debt Collection Laws to Know

While there is no official “state collection laws” summary, it’s important to know commercial collection laws by state. So while we can’t go over all 50 states, here are some of the major states and their respective collection laws:


California’s state collections laws dictate that collection agencies cannot report false information about a consumer or business debt. This means that if the debtor formally disputes their debt (in writing) the collection agency is legally obligated to note the dispute in any and all reports to third parties.


One of Colorado’s collection laws dictates that collection agencies must identify themselves within sixty seconds of confirming they’re speaking with the correct debtor. Failure to disclose the agency’s identity can result in a criminal penalty.


In Washington, it is illegal for a collection agency to publish or post (or cause to be published or posted) any list of debtors commonly known as “bad debt lists” or to threaten to publish such a list. 

New York

New York state debt collection laws declare it illegal to threaten to report a debtor to immigration authorities. Debtors have the right to submit a formal complaint to the Department of Consumer Affairs if they feel such a threat has been made or implied.


It is illegal for a debt collection agency to state or imply it has information or something of value for the debtor in order to solicit or discover information about the debtor. This includes reducing any outstanding debt amounts, providing classified information, or any other such incentives.

How FDCPA State Laws Apply to Businesses

There are differences between how commercial debtors and consumer debtors are protected via the law, the most critical of which is the fact that business debtors are not protected by the FDCPA.  This means debt collection agencies can take a more aggressive approach when chasing down businesses for reimbursement (or consumers who have borrowed money for business purposes).

Additionally, businesses do not benefit from the same legal exemptions as consumers. While individuals are entitled to keep portions of equity, such as a vehicle, businesses do not have the same protections — putting all of their assets in jeopardy.

This does not mean, however, that commercial collection agencies can completely disregard fair debt collection laws. These agencies still have to be licensed and accredited, and can still be the subject of civil lawsuits if they operate in a manner that is deemed to be unacceptable.

Furthermore, if a commercial collection agency is a member of the CCAA, they are obligated to uphold the organization’s code of ethics — a major benefit for any company looking to hire a collection agency.


Navigating state collections laws is challenging, which is why it’s always best to consult with a seasoned and reputable commercial debt collection agency, as well as a lawyer, to learn more about adhering to commercial collection laws by state and how to best protect your company. Here at Collection Bureau of America, we are a nationally licensed commercial debt collection agency with a long history of navigating collection laws by state. We are also fully compliant with all FDCPA, PCI, HIPAA, TCPA, and FCRA regulatory standards.If you’re looking for a team of commercial collection professionals you can depend on, leave it in the hands of the experts at Collection Bureau of America. Contact us today to speak with a debt collection professional.