What rights do you have to collect on debts as a small business owner?

As a Rhode Island business owner, you know that sometimes client accounts go unpaid. While you have the right to collect on these debts, you must do so under the terms of the state’s Fair Debt Collection Practices Act.

Review the basics of this state law so you can avoid sanctions while exercising your right to seek restitution for unpaid business debts.

Methods of contact

You can call a debtor for collections purposes only between 8 a.m. and 9 p.m. The law prohibits harassment of debtors, which includes not only threats and profanity but also repeated phone calls and texts. You may not publish the names of debtors in a newspaper or public place.

While you can attempt to connect with a debtor when he or she is at work, you must discontinue doing so by request. You cannot discuss the debt with the person’s family members or friends or threaten to do so. However, you can contact the person’s spouse.

Requests to cease contact

If the debtor provides contact information for his or her attorney and request that you contact the lawyer regarding the debt, you must follow these instructions in future collection attempts. The debtor can also request that you stop contacting them in writing. While you must adhere to this request, you can continue pursuing legal remedies for the debt.

In addition, you cannot inflate the past-due amount by charging excessive fees or interest beyond what the client originally agreed. Carefully review the full terms of the Rhode Island debt collection law before attempting to collect on outstanding invoices.

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