So, Let's Start With the Law: To Whom Do Collection Laws Apply These Days?

I hope everyone is familiar with the Fair Debt Collection Practices Act (FDCPA, 15 U.S.C. §§ 1692-1692p).  The Federal Trade Commission enforces the Act, which Congress passed in 1977.  Its purpose is to eliminate the use of abusive, unfair, or deceptive debt collection practices by most debt collectors.  15 U.S.C. § 1692.

Who is a "debt collector?"

For purposes of this Act, Congress broadly defines a "debt collector" as:

any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.  15 U.S.C. § 1692a. 

This sounds simple enough:  a debt collector is any person who regularly collects debts owed to others.

Does this mean that the FDCPA does not control how you collect from your own debtors?

Not always.  The Act further defines a debt collector as "any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts."  Id. (Emphasis added).

This provision contemplates the following scenario:  An individual applies for a MasterCard through a larger bank.  Larger banks generally have internal debt collection departments who attempt to collect arrearages before employing a third party collection agency.  The FDCPA does not regulate the bank's own collection agents, who contact a defaulted debtor, unless the representative suggests that a third party is performing the collection.  Third party "debt collectors" include independent collection agencies and folks like myself, a.k.a. collection attorneys.

Kansas and Missouri Law

With this said, it is essential that you know the applicable State laws, too.  Kansas and Missouri are simple because they have not enacted their own debt collection statutes and, therefore, subject their debt collectors to the arm of the FDCPA.  So, Kansas and Missouri collectors - be wary of the Feds.