A Question of Ethics: Fair Debt-Collection Practices
The check investors who were debt collectors did not act within the meaning of the Federal Debt Collection Practices Act (FDCPA). For example, they used the illegal theory that when the debt collection business collected only debts which it had owned because of buying checks written on accounts with insufficient funds, it was not subject to FDCPA provisions. In addition, they also hired check Investors Inc to implement their theory, which was illegal. The methods violated the FDCPA act which demands proper collection of debts in the business.
The practices of Check investors were unethical, as they did not ensure whether they were operating under the fair debt collection practices. For example, the Check investors had added a free of $125 to $130 which is higher than the set limit in most U.S states. In their defense, the Check investors can argue that they acted on their duties and responsibilities of their principal, Barry Sussman. They could argue that they did not bear the responsibility for the violation of FDCPA as they were just agents of Sussman. It shows that Sussman should bear the responsibility of the violations.
The deadbeats were the primary beneficiaries of laws including the FDCPA. The law would protect the deadbeats to ensure that they were operating under proper fair debt collection practices and programs. The drawers would not be subjected to unnecessary pressure from the check investors if the law was followed well.
The Fair Credit Act is the law implemented to enhance accuracy and privacy of the personal information comprised in the consumer reporting organizations. It seeks to protect the consumers from the negligent use of inaccurate data and information in the credit reports. The act prohibited the use of consumer information inaccurately in the debt collection practices. Thus, the act was useful in limiting the incorrect fees and restrictions on the collection of fair debts.