We had a sales employee on their own accord, threaten one of our customers that we'd send their debt to a collections agency in the next 7 days, when currently we don't have any intention to do so. I've heard that this is illegal to do, but can't necessarily find any documentation stating this. Does anyone know if this is true and possibly where I can find supporting documentation?
Debt Collection
Answers
Would depend on state laws regarding collections (which vary widely), but in my experience (WI and MN) intent doesn't come into play. Assuming the customer is in fact past due, in my experience you can get into more trouble for harassing the customer (calling repeatedly or calling before 8am, after 9pm, etc) than for saying you will send to collections. Generally the only time you would get into trouble for threatening collections is if the customer has filed bankruptcy and you continue to call even after receiving proper notice.
Disclaimer: Check your state regulations as laws vary widely by state.
You can contact the debt agency for the records and show them to the your client. If he get the payment notification then they might be got this by the debt collection process and so try to convanced them that you're not done that.
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Accounting